2. Consider the following payoffs for two projects, A and B, and the associated probabilities of earning these payoffs. PROJECT A PROJECT B Probability Payoff ($) Probability Payoff ($) 0.10 0 1 58 0.20 50 0.40 60 0.10 40 0.20 100 a. Which project has the highest expected monetary return? b. John is an expected utility maximizer and has the following utility function for money: u($) = ($)2 . Which of the two projects would he prefer? c. Is John risk-averse, risk-lover or risk-neutral? Explain

2. Consider the following payoffs for two projects, A and B, and the associated probabilities of earning these payoffs. PROJECT A PROJECT B Probability Payoff (S) I Probability Payoff (:13) _I_ I _I I I a. Which project has the highest expected monetary return? b. John is an expected utility maximizer and has the following utility function for money: u($) = ($)2. Which of the two projects would he prefer? c. Is John risk-averse, risk-lover or risk-neutral? Explain