Suppose the Two Countries Can Trade Shares in the Ownership

question 82

Essay

Suppose the two countries can trade shares in the ownership of their perspective assets.Further assume that a Home owner of a 25 percent share in Foreign land.He will receive 25 percent share in Foreign land and thus receives 25 percent of the annual Foreign kiwi fruit harvest.Further assume that also that a Foreign owner of a 25 percent share in Home land is permitted.In this case,a Foreigner is entitled to 25 percent of the Home harvest.Calculate the expected value of kiwi fruit for each investor.

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