Erik is an investor with $5,000 available for investment. He has the following three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year. Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing. 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? O He is risk-neutral. O He is risk-averse. He is risk-loving. O None of the above. Suppose the market risk premium is currently 6%. If investors were to become more risk-averse, the market risk premium might increase to 8%. What effect would you expect this to have on the prices of most financial assets? O Prices would decrease. O Prices would be unaffected. O Prices would increase