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Key considerations as Allied develops its strategy for disposing of the case are the probabilities associated with John’s response to an Allied counteroffer of \$400,000 and the probabilities associated with the three possible trial outcomes. John will accept a counteroffer of \$400,000 is 0.10, John will reject the counteroffer of \$400,000 is 0.40, and John will make a counteroffer of \$600,000 is 0.50. If the case goes to court, they believe the jury will award John damages of \$1,500,000 is 0.30, award John damages of \$750,000 is 0.50 and the probability the jury will award John nothing is 0.20.

What would a risk profile of recommended strategy be? Examples please.

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