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Question 2. Consider a mean-variance optimizer with risk aversion coefficient A = 1. Suppose there are two lotteries: lottery A, which pays 10 dollars with

Question 2. Consider a mean-variance optimizer with risk aversion coefficient A = 1. Suppose there are

two lotteries: lottery A, which pays 10 dollars with probability 1/2 and 0 dollars with probability 1/2 , and

lottery B, which pays 15 dollars with probability 1/3 and 0 dollars with probability 2/3 . Which lottery does he

prefer?

Lottery A or Lottery B ??

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