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Alex,who Is Risk-Neutral,is Looking for an Apartment

Question 77

Multiple Choice

Alex,who is risk-neutral,is looking for an apartment.The distribution of apartments of equal quality is as follows: 70% rent for $700 per month,20% rent for $600 per month,and 10% rent for $500 per month.Alex's costs of searching rise by $10 with each search.
The expected value of rent in this apartment market is


A) $700.
B) $660.
C) $600.
D) $500.

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