Professor Victor presents Dean Gary with two new proposals for offering a graduate certificate program. Both programs will cost $50,000, for classroom and instructor time. Both programs are projected to have two possible revenue outcomes. Program 1, which focuses on accounting, is projected to have a 50% chance of generating $150,000 in revenue and a 50% chance of generating $100,000 in revenue. Project 2, which focuses on cryptocurrencies, is predicted to have a 62.5% chance of generating $200,000 in revenue or, otherwise, generating no revenue!

What is the expected value of each program?

What is the variance of each program? (2pt)

If Dean Gary picks the cryptocurrencies program, what does that tell us about his risk preference (risk-loving, risk-neutral, or risk-averse)?