• You are now offered a chance to do some investment of buying shares of a stock.
• All shares of stock owned at the end of each period will pay a dividend.
• Dividends will be paid on all shares owned after trading in a round is complete.
• Dividend paid depends on the outcome of a random process.
• A random number from 1 to 10, with each integer in this interval being equally likely. This random "state" determines which column of the Dividend Table shown above is relevant.
• Each of the dividend amounts listed in the bottom row of the table are equally likely to be earned on each share that you own.
• There are 20 periods for yielding dividends.
• All shares of the stock that you own at the end of the final trading period (from your endowment or obtained by purchase) will be redeemed for$7.00each.
• You may also keep your money in cash.
• Each dollar in retained cash (from the end