Bob proposes a risky investment project to Alice. The project has the following payouts and respective probabilities (negative payouts represent loss and positive payouts represent gain from the investment).

Scenario	Payout	Probability
Worst	-$300	0.50
Moderate	$ 100	0.20
Best	$500	0.30

Alice does not prefer to invest because she finds the project too risky. Bob makes some changes to the project, which increases its best case scenario payout by $50, but decreases the worst case scenario payout by $30 (i.e., loss is also higher now).

Assume that Alice has taken the RMI 1301 class, and she measures risk by the standard deviation. In your opinion, Alice is likely to

(Tip: You can answer this question without much calculation)

invest in the modified project because it is less risky.

reject the modified project as well because it has higher risk.

invest in the modified project because her best case payout is clearly higher.

invest in the modified project because the best case payout is higher while the expected value remains the same.