Jessica is taking a direct flight to another state and concerned about contracting the COVID19 virus on the plane. She believes that an N95 mask offers more protection than the KN95 mask she owns. However, it is difficult to obtain N95 masks from the suppliers she has access to, e.g. Amazon, local pharmacies. She deems that there is an uncertainty of whether her flight gets crowded or not and assigns a probability of 0.25 for it being crowded, defined by more than 40% of the seats being filled. If she knew that the flight would indeed be crowded, she would be willing to pay $100 for the use of an N95 mask for the flight. If the flight will not be crowded, she is content with her KN95 mask and would not willing to pay anything to use another mask. Her friend Lucy has an N95 mask still in its sealed package. They agree that Jessica will pay $20 to borrow the mask from Lucy for the trip with the understanding that Jessica will wear her own KN95 mask and take Lucy's sealed N95 mask on the plane. If the flight is not crowded, Jessica can keep the N95 mask in the seal. If the flight is crowded, she can open the seal and use the N95 mask for the flight, in which case she will send another $10 to Lucy's Venmo. In either case, upon reaching the destination, Jessica will mail the mask back to Lucy. The $20 includes the postage due. Which of the following statements is true? 1. If Jessica is risk-neutral, she should have been willing to pay Lucy up to $25. II. If Jessica is risk-averse with a risk tolerance of $100, she should have been willing to pay Lucy up to $25. III. If Jessica is risk-neutral, she would be willing to pay Lucy up to $20 to exercise the option of opening the seal. Jessica is taking a direct flight to another state and concerned about contracting the COVID19 virus on the plane. She believes that an N95 mask offers more protection than the KN95 mask she owns. However, it is difficult to obtain N95 masks from the suppliers she has access to, e.g. Amazon, local pharmacies. She deems that there is an uncertainty of whether her flight gets crowded or not and assigns a probability of 0.25 for it being crowded, defined by more than 40% of the seats being filled. If she knew that the flight would indeed be crowded, she would be willing to pay $100 for the use of an N95 mask for the flight. If the flight will not be crowded, she is content with her KN95 mask and would not willing to pay anything to use another mask. Her friend Lucy has an N95 mask still in its sealed package. They agree that Jessica will pay $20 to borrow the mask from Lucy for the trip with the understanding that Jessica will wear her own KN95 mask and take Lucy's sealed N95 mask on the plane. If the flight is not crowded, Jessica can keep the N95 mask in the seal. If the flight is crowded, she can open the seal and use the N95 mask for the flight, in which case she will send another $10 to Lucy's Venmo. In either case, upon reaching the destination, Jessica will mail the mask back to Lucy. The $20 includes the postage due. Which of the following statements is true? 1. If Jessica is risk-neutral, she should have been willing to pay Lucy up to $25. II. If Jessica is risk-averse with a risk tolerance of $100, she should have been willing to pay Lucy up to $25. III. If Jessica is risk-neutral, she would be willing to pay Lucy up to $20 to exercise the option of opening the seal