Question: An oil company is set up solely for the purpose of exploring for oil in a certain small area of Texas. Its value depends primarily

An oil company is set up solely for the purpose of exploring for oil in a certain small area of Texas. Its value depends primarily on two stochastic variables: the price of oil and the quantity of proven oil reserves. Discuss whether the market price of risk for the second of these two variables is likely to be positive, negative, or zero.

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