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…showed last 75 words of 520 total…of Cl as long as that money was guaranteed. In the opposite situation where the potential payoff is the critical factor, L would be favored over H and Cl > Ch. But here, the buyout X would never be accepted because both H and L will always have a greater potential payoff. This results in an underpricing of L and of H, since Cl and Ch will not be any different than L and H respectively.