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No Rain (NR) pays $1 at the end of the month if there is less than 10 inches of rain and $0 otherwise. The price
No Rain (NR) pays $1 at the end of the month if there is less than 10 inches of rain and $0 otherwise. The price of this contract is $0.40.
Suppose that the probability of 10 inches of rain is 45%.
What is the expected return to the No Rain (NR) contract?
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