Question: Pelican Point Financial Group s clientele consists of two types of
Pelican Point Financial Group’s clientele consists of two types of investors. The first type of investor makes many transactions in a given year and has a net worth of over $ 1.5 million. These investors seek unlimited access to investment consultants and are willing to pay up to $ 20,000 annually for no- fee- based transactions, or alternatively, $ 40 per trade. The other type of investor also has a net worth of over $ 1.5 million but makes few transactions each year and therefore is willing to pay $ 120 per trade. As the manager of Pelican Point Financial Group, you are unable to determine whether any given individual is a high- or low- volume transaction investor. Design a self- selection mechanism that permits you to identify each type of investor.
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