25 of 29 Marks Your friend is contemplating buying a local restaurant. He has assessed the lifetime profits, including resale, to be $11 million with 20% chance, $6 milion with 60% chance or $3 million with 20% chance. Knowing the most your friend would pay for the restaurant is $6.4 million, what can you infer about the situation? o A The expected payoff of the restaurant is $6.4 million, the risk-premium being required by your friend is $0 and your friend is risk neutral with respect to this purchase. o B. The expected payoff of the restaurant is $6.333 million, the risk-premium being required by your friend is $333,000 and your friend is risk averse with respect to this purchase. o C. The expected payoff of the restaurant is $6.4 million, the risk-premium being required by your friend is $200,000 and your friend is risk seeking with respect to this purchase. O D. The expected payoff of the restaurant is $6.333 million, the risk-discount being offered by your friend is $77,000 and your friend is risk averse with respect to this purchase Finish attempt