One of our clients, Mr. Choi, currently has an investment portfolio value of $1mil. His optimal portfolio consists of 40% risky portfolio and 60% risk-free asset. Answer the following 2 questions a), and b) .

a. (5pts) If Mr. Choi has nowextra$100,000 to invest, and if he is a constant relative risk aversion, how do you think he wants to allocate his extra $100,000 over the risky and the risk-free asset.

b. (5pts) Assume that Mr. Choi's utility is a power function with g = 0.8. If another client, Mr. Smith, also has a power utility function but has a smaller risk preference parameter value of g than Mr. Choi does, how does Mr. Smith want his money to be allocated relative to Mr. Choi?

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