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Please see the questions below and provide answers. Thank you. Suppose an investor, Erik, is offered the investment opportunities described in the table below. Each

Please see the questions below and provide answers. Thank you.

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Suppose an investor, Erik, is offered the investment opportunities described in the table below. Each investment costs $1, today.r and provides a payoff, also described below, one year from now. Option Payoff Dne l'ear from How 1 l': chance of receiving 3; 1,1{1D 2 5D% chance of receiving $1.l]D 5% chance of receiving :15 1,2 SHEA: chance of receiving $2UD SHEA: chance of receiving $2,{} If Erik is a risk neutral investor, which investment will he prefer? 0 Erik will be indifferent toward these options. 0 Erik will choose option 1. 0 Erik will choose option 2. 0 Erik will choose option 3. In conb'ast. Erik's brother, Devin. is risk averse. which of the following statements is true about Devin? O Evervthing else remaining constant, Devin will prefer Option 3. C3 Everything else remaining constant, Devin will prefer Option 2. O Evervthing else remaining constant, Devin will prefer Option 1. C3 None of the above

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