1. You are in the market for a used car. At a used car lot, you know...

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1. You are in the market for a used car. At a used car lot, you know that the blue book value for the cars you are looking at is between and . If you believe the dealer knows as much about the car as you, how much are you willing to pay? Why? Assume that you care only about the expected value of the car you buy and that the car values are symmetrically distributed.

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Financial Markets And Institutions

ISBN: 9780134519265

9th Edition

Authors: Frederic S. Mishkin, Stanley G. Eakins

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