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Suppose John is risk neutral and faces an uncertain outcome in which he loses $1000 with probability p and $0 with probability ( 1 p

Suppose John is risk neutral and faces an uncertain outcome in which he loses $1000 with probability p and $0 with probability ( 1 p ) (1p), and John knows the value of p. John is offered insurance. John's value of this insurance is \40, i.e. his maximum willingness to pay for the insurance is $40. What is the value of p with 0.

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