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A prominent singer/songwriter recently received two offers for the rights to her music. BMI offered her a large contract where she would get $150 million,
A prominent singer/songwriter recently received two offers for the rights to her music. BMI offered her a large contract where she would get $150 million, but only if there were more than 1,000,000 downloads of her songs. On the other hand, Sony offered her a guaranteed $30 million. Given this information, which of the following statements is true? Q If the artist thinks there will be more than 1,000,000 downloads with 20% probability and prefers to sign with Sony, then she must be risk averse. Q If the artist thinks there will be more than 1,000,000 downloads with 10% probability and signs with Sony, then she must be risk averse. Q If the artist thinks there will be more than 1,000,000 downloads with 10% probability and signs with Sony, then she must be risk averse. Q If the artist thinks there will be more than 1,000,000 downloads with 10% probability and signs with BMI, then she must be risk averse
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