QUESTION THREE (11 pts). An investor with initial wealth y is deciding whether to invest it in a riskless asset or in a risky asset. The riskless asset has a fixed rate of return of r > 0. The risky asset has 2 possible rates of return, Or and OH, with an average rate of return of E(0;) = PLOL + PHOH. (i) (2 pts). What is the investor's expected wealth from investing in the risky asset? (ii) (2 pts). Suppose the investor's utility is a linear transformation of their wealth, u(.) = A(.), where A is some positive constant. What does this imply about the investor's risk attitudes? (iii) (2 pts). What is the investor's expected utility from investing in the risky asset? (iv) (2 pts). What is the investor's utility from investing in the riskless asset? (v) (3 pts). Derive a condition under which the investor will prefer the risky asset. Inter- pret