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What is the largest amount you are willing to pay

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Question - You are offered the opportunity to open a shop in a beach area. There is a 20% chance for the coming summer to be rainy and an 80% chance to be sunny. In a sunny summer your profits are $90,000, while in a rainy summer your profits are $60,000. Assuming you are risk neutral, what is the largest amount you are willing to pay for this opportunity?

Reference no: EM133140431

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