(b) (10 points) Now we change the model to make it three-period, so t = 0, 1,2. An agent endows

units of consumption goods at the beginning of period t = 0, 1,2. The agent's lifetimeutility becomes

Besides the one-period real bond, an agent can also purchase or issue a two-period real bond atthe credit market at period 0. The two-period real bond is a zero-coupon bond. That means theissuer of a two-period bond pays 1 unit of consumption goods to the bond holder at period 2,but the issuer does not pay any interest at period I to the bond holder. Solve for the equilibriumprice of the two-period real bond at period 0.