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content area top Part 1 Risk preferences Investment 1 has a 50% chance of paying $250 and a 50% chance of paying $500. Investment 2
content area top Part 1 Risk preferences Investment 1 has a 50% chance of paying $250 and a 50% chance of paying $500. Investment 2 has a 50% chance of paying $50 and a 50% chance of paying $700. Both investments cost $355 today. a.What is the expected value of the payment that each investment will make, not counting the initial cost? b.What is the expected return for each investment? c.Which investment does a risk-seeking investor prefer? d.Which investment does a risk-neutral investor prefer? e.Which investment does a risk-averse investor prefer
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