QUESTION 3 Consider a sequential trade model in which a security has an uncertain value. The value V of the security can either be $150 or $250 with equal probability. The proportion of informed traders is 4096, whereas the proportion of liquidity traders is 60%6. As usual, liquidity traders buy or sell with equal probability, whereas informed traders only buy when they know the security price is high and sell when they know the security price is low. The probability that V = $250, conditional that the first trade is a sell, is: a. P[V = 250 | Sell] = 0.2 O b.P[V = 250 Sell] = 0.3 CP[V = 250 | Sell] =0.5 d. P[V = 250 | Sell] = 0.7 e PLV = 250 Sell] = 0.8 Of. None of the above. QUESTION 4 In the sequential trade model: O a. The acknows whetferraders are informed or fot. O b. The Healer does nosacow whether traders are informed or not. O c The dealer doeshot care if trapere informed or not. d. None of the Above QUESTION 5 Consider a sequential trade model in which a security has an uncertain value. The value V of the security can either be $150 or $250 with equal probability. The proportion of informed traders is 40%, whereas the proportion of liquidity traders is 60%. As usual, liquidity traders buy or sell with equal probability, whereas informed traders only buy when they know the security price is high, and sell when they know the security price is low. The dealer will set his bid at: a. Bid = 170 b. Bid = 180 O c. Bid = 200 d. Bid = 220 Oe. Bid = 230 OF. None of the above