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Unformatted text preview: ii. Calculate the expected value of the gamble. iii. Calculate the expected utility of the gamble. iv. Calculate the certainty equivalent of the gamble. v. Calculate the risk premium. vi. Draw on a diagram. Be accurate. 3. A tradeo between incentives and insurance is at the heart of the agency problem. Discuss 4. True, False, Uncertain, Explain. If agents actions (eort) could be observed, then there is no agency problem. 5. If a critical task is dicult to measure, then all incentives should be weak. Discuss 1...
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- One '09