Q 18.18. A house up for auction can be worth either $500,000 or $1,000,000 with 50-50 probability.
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Q 18.18. A house up for auction can be worth either $500,000 or $1,000,000 with 50-50 probability. The other bidders know the true value; you do not. If you bid for the house in an auction, what should you bid? If you bid $750,000, what is your expected rate of return?
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