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4) A risk averse investor is offered the choice of two risky projects: Project returns (after one year) 450 with 30% probability, 900 with 60%
4) A risk averse investor is offered the choice of two risky projects: Project returns (after one year) 450 with 30% probability, 900 with 60% probability, and 1,100 with 10% probability Project returns (after one year) 250 with 20% probability, 850 with 70% probability, and 1,400 with 10% probability Both investments cost 725. Which project should the investor choose, and why? (15 marks)
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