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Signal Before a Binary Trade

题目

A trade pays +8 in a favorable state and -5 in an unfavorable state. The favorable state has prior probability 25\frac{2}{5}. Before trading, you may buy a signal for cost 12\frac{1}{2}; it is correct with probability 45\frac{4}{5}. If you see the signal, you may either trade or abstain after observing it. What is the value of the signal, and should you buy it at that cost?

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你的答案

signal value

should buy signal