Question 1 (12 marks)- Consider a Kyle (1985) model set-up in which the true value of the stock is $75.00, the unconditional variance of the true value is 8, the variance of uninformed trading is 15,000 and the expected value of the stock is $80.00 without private information. That is: F = $75.00- o = 8.00 - o = 15,000 F=$80.00 a 1 (a) Calculate the informed trader's equilibrium trading demand (2). Report your response to four decimal places. Interpret the result. (2 marks) Write answer here (b) Calculate the dealers price sensitivity in equilibrium (2). Report your response to four decimal places. Interpret the result. (2 marks) Write answer here (c) Calculate the informed trader's expected profit in equilibrium (). Report your response to four decimal places. (1 mark) 7 Write answer here (d) Now, let us assume that the realised uninformed trading demand is 500. That is, z = 500. Let us also assume that the informed trader submits the trading demand derived in Part (a). 0 Calculate the dealers price if they follow their equilibrium strategy (PW)). Report your response to four decimal places. (1 mark) Write answer here- Calculate the informed trader's realised profit (x). Report your response to four decimal places. (1 mark) Write answer here (iii) Calculate the dealers' realised profit (sexe). Report your response to four decimal (e) Now, let us assume that the realised uninformed trading demand is -200. That is, z = -200. Let us also assume that the informed trader submits the trading demand derived in Part (a).- (0) Calculate the dealers' price if they follow their equilibrium strategy (p(w)). Report your response to four decimal places. (1 mark) Write answer here (1) Calculate the informed trader's realised profit (1). Report your response to four decimal places. (1 mark) Write answer here (iii) Explain the difference in the informed trader's profit from Part (d)(ii) to Part (e)(ii). (2 marks) Write answer here