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Are you risk averse? Let us say you are presented with the following investment opportunities. Which of the two do you prefer? 1.? Invest $10K

Are you risk averse?

Let us say you are presented with the following investment opportunities. Which of the two do you prefer?

1.? Invest $10K now and one year from now flip a coin: if "head" you pocket $50K, if "tail" you *pay* an additional $20K 2.? Invest $10K now and receive $15K in a year.

Explain your choice. Please note that there is not right or wrong answer. Attitude towards risk varies from an individual to another.

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