A company borrows $$4$ to finance a project. It has two choices when beginning the project. The

first option has potential payoff of either $$2$ or $$8($both equally likely$).$ The second option has

potential payoffs of $$0$ or $$16($both equally likely$).$ The lender would prefer the option

because the expected value of the first option is and the expected value of the second

option is

first; $$3$;$$2$

first; $$8$;$$5$

second; $$5$;$$8$

second; $$16$;$$4$