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Tim has preferences over consumption in period 1 and 2 of the form4/324/11212),(xxxxu=. The price of consumption is $1 in both periods. He has $6,000 in the bank now and is trying to decide between two different investment opportunities, A and B.

A: invest $5,000 in period 1 and receive $12,000 in period 2.

B: invest $1,000 in period 1 and receive $3,000 in period 2.

Reference no: EM131280835

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