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Duncan Laurence, a recent winner of Eurovision Song Contest, has recorded a new album. Sony Music Entertainment has offered Duncan $200 million for rights to

Duncan Laurence, a recent winner of Eurovision Song Contest, has recorded a new album. Sony Music Entertainment has offered Duncan $200 million for rights to the album, while Warner Music Group has offered him a contract where he gets $100 million, plus an additional $200 million if the album sells more than 100,000 copies.

Which of the following are true. Choose the single best answer and explain your choice.

A. If Duncan thinks he will sell more than 100,000 copies 60% of the time and signs with Sony, then he must be risk averse.

B. If Duncan thinks he will sell more than 100,000 copies 40% of the time and signs with Sony, then he must be risk averse.

C. If Duncan thinks he will sell more than 100,000 copies 60% of the time and signs with Warner, then he must be risk loving.

D. If Duncan thinks he will sell more than 100,000 copies 50% of the time and signs with Warner, then he must be risk loving.

E. both (a) and (d) are correct

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