1. Consider a variation of the Glosten-Milgrom sequential trade model where the asset's value V can take three values. Suppose that the true value of stock in Trident Corporation can be, with equal probability, either VH=43,VL=41, or some middle value VM. Let =31 of the traders be informed insiders, while the remaining 1=32 are uninformed noise traders. Assume as always that informed traders always buy when V=VH and sell when V=VL, while uninformed traders buy or sell with equal probability. The focus of this problem is the traders' behavior when V=VM. ii. (3) Using Bayes' rule, calculate the posterior probabilities of V taking on each value conditional on a buy, and compute the ask price as a function of VM. 1. Consider a variation of the Glosten-Milgrom sequential trade model where the asset's value V can take three values. Suppose that the true value of stock in Trident Corporation can be, with equal probability, either VH=43,VL=41, or some middle value VM. Let =31 of the traders be informed insiders, while the remaining 1=32 are uninformed noise traders. Assume as always that informed traders always buy when V=VH and sell when V=VL, while uninformed traders buy or sell with equal probability. The focus of this problem is the traders' behavior when V=VM. ii. (3) Using Bayes' rule, calculate the posterior probabilities of V taking on each value conditional on a buy, and compute the ask price as a function of VM