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Given the following information on lotteries (L1 and L2). Note that the probability values follow binomial probability distribution with 60% and 45% probability of success

Given the following information on lotteries (L1 and L2). Note that the probability values follow binomial probability distribution with 60% and 45% probability of success for L1 and L2 respectively.

State-contingent asset payoffs

State

1

2

3

Probability

P(x=0)=?

P(x=1)=?

P(x=2)=?

L1 (payoff)

200

1500

3700

L2 (payoff)

900

1350

1850

Calculate the probability for each state

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