A house up for auction can be worth either $500,000 or $1,000,000 with 50-50 probability. The other

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A house up for auction can be worth either $500,000 or $1,000,000 with 50-50 probability. The other bidders know the true value; you do not.

If you bid for the house in an auction, what should you bid? If you bid

$750,000, what is your expected rate of return?

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Corporate Finance An Introduction

ISBN: 9780321277992

1st Edition

Authors: Ivo Welch

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Question Posted: Oct 26, 2024 04:02 AM

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A house up for auction can be worth either $500,000 or $1,000,000 with 50-50 probability. The other

Question:

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Corporate Finance An Introduction

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