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A vendor offers an intrusion detection system (IDS) that costs $20,000 and claims that the IDS will reduce the probability of a major security breach significantly. A security administrator estimates the cost of a major security breach to be $800,000. She further estimates that without the IDS in place there is 3% chance of a major security breach. At most how high can the probability of a major security breach be with the IDS in place for a risk-neutral rational decision maker to purchase the IDS?

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Computer Engineering, Engineering

Category:- Computer Engineering
Reference No.:- M9887619

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