Jane StreetTraderAssistant TraderQuestion #200
A seller is offering you a car whose value is uniformly distributed between 0 and 1000, but you do not know the real value and must bid for the car. If your bid is higher than the car's actual value, you buy the car at your bid price and can then resell it elsewhere for 1.5 times its real value. Otherwise, the transaction does not occur. You can only bid once. What is your optimal bid price?
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