The management and economy with expected utility E[U(r_p)]=_p-0.5A_p^2 are concerned about investing in carp and eel businesses such as: However, the interest rate on bank deposits that are risk-free assets is 5.0%.

	state	probability	rate of return
carp	boom recession	0.25 0.75	40% 00%
eel	boom recession	0.25 0.75	00% 20%

(1)If you could do only one business in the carp business, eel business, or bank deposit, what kind of business should A=4-person management do?

(2) Continue at 1. If you do business with carp and deposits alone, what is the optimal portfolio for A=0 management?