Singer/songwriter Paul Simon recently received two offers for the rights to his music. BMI offered him a large contract where he would get $250 million, but only if there were 1,000,000 downloads of his songs. On the other hand, Sony offered him a guaranteed $50 million. Given this information, which of the following statements is true?

Group of answer choices

1) If Paul Simon thinks there will be more than 1,000,000 downloads 10% of the time and signs with BMI, then he must be risk averse

2) If Paul Simon thinks there will be more than 1,000,000 downloads 10% of the time and signs with Sony, then he must be risk averse

3) If Paul Simon thinks there will be more than 1,000,000 downloads 25% of the time and BMI, then he must be risk neutral.

4) If Paul Simon thinks there will be more than 1,000,000 downloads 20% of the time and prefers to sign with Sony, then he must be risk averse