$12\mathrm{.}28$ Jay Olsen, a writer of novels, jus his com$-$

pleted a new hriller nowel. A move compary and a

TV nework both want exdusive rights to market his

new title. If he signs with the network, he will rexive

a single lump sum of $$900,$ but if he signs with the

movie compuny, the anount he will receive depends

on how successul the mowie is at the box oflice. $($All

$ units are in thousends.$)$

TV Network $$900$

Movic

$($a$)$ Which oplion would you recommend based

on the expected moneliry value $($EMV$)$ crite

rion? $($Assume that be is a risk$-$neutral peron

interested in maxinizing the capected monetary

value.$)$

$($b$)$ How much would he be willing to pay to know

the true siate of nature?

$($c$)$ Jay can send his nowel to a prominent movic

critic to asess the poicntial box office sueces.

Fron his past experiene, the movie critic's reli$-$

ability of prodicting the box office success is as

follows. Favorable prediction means that it is

highly likely the movie would be a box oflice

sweds. II will cos $$20$ lo get his now walu$-$

alod by the movie critic.