What type of claim would each woman hold

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Ms. White and Ms. Black own farms next to each other. When the weather is good, each farm produces 2,000 tons of apples per year. When the weather is bad, each farm produces 1,000 tons per year. Ms. White is risk-averse. Ms. Black is willing to accept additional risk in exchange for a sufficient increase in her average rate of return. If good and bad weather occur with equal probability, and if Ms. White will accept a guaranteed return of 1,000 apples per year, can the two women effect a mutually beneficial exchange? What type of claim would each woman hold?

Reference no: EM13892372

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