Erik is an investor with $$5,000$ available for investment. He has the following three investment possibilities from which to choose:

Option

Scenarios

$1$ Keep the $$5,000$ in cash for one year.

$2$ Invest in a friend$$s business with a

$50\%$ chance of getting $$10,000$ after one year and a

$50\%$ chance of getting nothing.

$3$ Invest in a relative$$s business with a

$30\%$ chance of getting $$15,000$ after one year,

$20\%$ chance of getting $$2,500$ after one year,

$50\%$ chance of getting nothing.

If Erik is indifferent about these three investment options, and he thinks that they are worth the same to him. Therefore, which of the following statements is true about Erik?

He is risk$-$neutral.

He is risk$-$averse.

He is risk$-$loving.

None of these descriptions is accurate.

Later, while examining the same investment alternatives, Erik$$s brother, Devin, clearly expressed a preference for option $1.$ Which of the following statements is true about Devin?

He is risk$-$averse.

He is risk$-$neutral.

He is risk$-$loving.

None of the above.