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Consider a Kyle (1985) model set-up in which the true value of the stock is $100.00, the unconditional variance of the true value is 60
Consider a Kyle (1985) model set-up in which the true value of the stock is $100.00, the unconditional variance of the true value is 60 and the variance of uninformed trading is 10,000.If the value of the stock is $80.00 without private information, the insider's equilibrium expected profit is:
Select one:
a.$774.60
b.$0.00
c.$387.30
d.$64,549.72
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