Unsystematic risk is not compensated in equilibrium because it can be eliminated for free through diversification.   Select one: True False

I need help with question d

In the Hawaiian Beach Boy surf board vendor scenario, what if the fine was increased to $190 but the probability of a fine decreased to one in 20 days, 5%?  What would be the expected value – Exp(RS) --  of continuing to rent surfboards?  Assume the other numbers stay the same.  He makes $300/day and to rent boards from friends costs him $100 a day.  So, he makes $200 a day.  Write out the expected value formula, plug in the numbers, and show the math.  Hint: the Exp(RS) should be higher than the previously calculated $160.

A seller has an indivisible asset to sell. Her reservation value for the asset is s, which she knows privately. A potential buyer thinks that the assetís value to him is b, which he privately knows. Assume that s and b are independently and uniformly drawn from [0, 1]. If the seller sells the asset to the buyer for a price of p, the seller's payoff is p-s and the buyer's payoffis b-p.  Suppose simultaneously the buyer makes an offer p1 and the seller makes an offer p2. A transaction occurs if p1>=p2, and the transaction price is 1/2 (p1 + p2). Is the following strategy profile a Bayesian Nash equilibrium: the buyer chooses p1 = 1/2 if b>=1/2 and he chooses p1=0 if b<1/2; the seller chooses p2=1/2 if s<1/2 and she chooses p2=1 if s>1/2. Why or why not? Can there be a Bayesian Nash Equilibrium in which the transaction price is .9 whenever there is a transaction? Why or why not?