5. Risk aversion Erik is an investor with $5,000 available for investment. He has the folllowing three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year 1 2 Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing Invest in a relative's business with a 3 30% chance of getting $15,000 after one year, 20% chance of getting $2,500 after one year 50% chance of getting nothing. If Erik is indifferent about these three investment options, and he thinks that they are worth the same to him. Therefore, which of the following statements is true about Erik? He is risk-neutral. He is risk-averse He is risk-loving. None of the above. Later, while examining the same investment alternatives, Erik's brother, Devin, clearly expressed a preference for Option 1. Which of the following statements is true about Devin? He is risk-averse. He is risk-neutral He is risk-loving. None of the above