Suppose a household faces the following utility function and budget constraint: U = C -IC 2 C = AR +AR, + WI - AitI - ArtI where U is utility; C is consumption in period ; A; and A, are stocks and bonds held at the start of time t respectively; R; = (1 + r ) and R) = (1 + r, ) are period t gross returns to investing in stocks and bonds respectively and w, is labour income at time f