Question: Problem 1 Suppose the the economy in Example 1, Lecture 1 lasts for three quarters. Similar to Example 4 of Lecture 1, consider a security

Problem 1 Suppose the the economy in Example 1, Lecture 1 lasts for three quarters. Similar to Example 4 of Lecture 1, consider a security that pays dt = $1 if the economy state in quarter it is G and dt = $0 if the economy state in quarter 73 is B. Let X 2 d1 + d2 + d3. Let 3,75 = 1, 2,3 be the sigmaalgebra that describes the information at time t. 1. Calculate the conditional expectations Z = IE[X|J-'t] (note that Zt's are random variables themselves). 2. Find the Ualgebras generated by Z, t = 1, 2, 3

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QUESTION 3: (8 marks) Clarify the distinguish features between broker and a factor agent in an agency contract

1. To gain insight into how a communication situation can be framed to maximize impact.

2. We can change the use and meaning of the concepts and thereby the meaning of the social reality to which they refer.

3. What does it mean when we say that we attribute a certain meaning to our experiences?