If you have $1000 to invest and are considering buying some combination of the shares of two companies, SnakeInc and LionInc. Shares of SnakeInc will pay a 5 percent return if the Liberals are elected, an event you believe to have a 20 percent probability; otherwise the shares pay a zero return. Shares of LionInc will pay 10 percent if the Conservatives are elected (a 80 percent probability), zero otherwise. Either the Conservatives or the Liberals will be elected.

the first question is: If your only concern is maximizing your average expected return, with no regard for risk, how should you invest your $1000?

snakeInc:

LionInc: