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You are considering buying a lottery. If the lottery pays you two years later either $ 9 , 0 0 0 with the probability of

You are considering buying a lottery. If the lottery pays you two years later either $

9, 000

with the probability of

2 / 3

or $

12, 000

with the probability of

1 / 3,

then what would be the fair price of the lottery? the interest rate is

10 % (

How much are you willing to pay now for the lottery?

)

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