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Question 1 1 pts An investor (buyer) values a financial security at $910 if it is low risk, and $855 if it is high risk.
Question 1 1 pts An investor (buyer) values a financial security at $910 if it is low risk, and $855 if it is high risk. Sellers value low risk at $889 and high risk at $841. If the buyer cannot observe type, but believes that fraction 0.7 are low risk (and the rest are high risk), then the buyer is willing to pay ____ and this __ generate an adverse selection problem. 0 $885; will 0 $885.5; will not 0 $893.5; will 0 $893.5; will not
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