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12) Project A has a 30% likelihood of success and costs $1million. Project B has an 80% chance of success but costs $3million. Consider the
12) Project A has a 30% likelihood of success and costs $1million. Project B has an 80% chance of success but costs $3million. Consider the Gross Benefit of failure to be zero for both projects
Which is preferable to the risk-averse investor? a) 50% chance of $10m and 50% chance of zero b) 50% chance of $1m and 50% chance of $9m c) $2m d) $0 with a 1/3rd chance and $3m with a 2/3rd chance e) Not enough information to say definitively
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