2 Q4: In the real estate project discussed in class, now suppose individualhas risk tolerance r1 = $10,000, and individual 2 has risk tolerance r2 D$40,000.(1) What is the optimal risk sharing rule?(2) What are their respective CE?(3) What is the maximal total CE with joint risk tolerance?

These questions is related to risk management. Risk management is the responsibility of all…

Q4: In the real estate project discussed in class, now suppose individual has risk tolerance r1 = $10,000, and individual 2 has risk tolerance r2 = %3D $40,000. (1) What is the optimal risk sharing rule? (2) What are their respective CE? (3) What is the maximal total CE with joint risk tolerance?

Q4: In the real estate project discussed in class, now suppose individual has risk tolerance r1 = $10,000, and individual 2 has risk tolerance r2 = %3D $40,000. (1) What is the optimal risk sharing rule? (2) What are their respective CE? (3) What is the maximal total CE with joint risk tolerance?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.3P

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