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Suppose that, for the conditions in Exercises 7 and 9, a

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Suppose that, for the conditions in Exercises 7 and 9, a person either can pay a cost c for the opportunity of observing

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Suppose that, for the conditions in Exercises 7 and 9, a person either can pay a cost c for the opportunity of observing the value of X before predicting the value of Y or can simply predict the value of Y without first observing the value of X. If the person considers her total loss to be the cost c plus the M.S.E. of her predicted value, what is the maximum value of c that she should be willing to pay?

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