There is a 15 percent probability the economy will boom; otherwise, it will be normal. stock g should return 15 percent in a boom and 8 percent in a normal economy. stock h should return 9 percent in a boom and 6 percent otherwise. what is the variance of a portfolio consisting of $3,500 in stock g and $6,500 in stock h?
a) .000209
b) .000247
c) .002098
d) .037026
e) .073600

Many potential buyers value high-quality used cars at the full-information market price of € p1 and lemons at € p2. a limited number of potential sellers value high-quality cars at € v1 ≤ p1 and lemons at € v2 ≤ p2. everyone is risk neutral. the share of lemons among all the used cars that might be potentially sold is € θ . suppose that the buyers incur a transaction cost of $200 to purchase a car. this transaction cost is the value of their time to find a car. what is the equilibrium? is it possible that no cars are sold