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Unformatted text preview: FIN 367: Spring 2008 Quiz # 2: Payoff Diagrams and Basic Statistics February 13, 2008 NAME: SECTION: Time allowed: 20 minutes. Maximum possible score: 20. NOTE: If I cannot understand your calculations, I will not be able to give you full credit even if your final answer is correct. You cannot say these calculations are obvious. If a problem is missing some key information that you think is necessary to solve the problem, please ask me to clarify the question or state your confusions clearly. Alternatively, please make appropriate assumptions, state them clearly and proceed. No credit will be awarded if you fail to state your confusions or assumptions explicitly even if the question is wrong . Partial credits may be awarded if you show your calculations or provide arguments to support your answers. 1 Suppose the economy can only be in one of the following two states: (i) Boom or good state and (ii) Recession or bad state. Each of the states can occur with an equal probability.and (ii) Recession or bad state....
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- Spring '07