Stochastic Dominance 2. Risk Premium Part I 5 4.16. Consider the following investments: Investment 1 Investment 2 Payoff Prob. Payoff Prob. 1 0.25 3 0.33 7 0.50 5 0.33 12 0.25 8 0.34 Check that neither investment dominates the other on the basis of First Order Stochastic Dominance and Second Order Stochastic Dominance How could you rank these investments ?

please help the First order stochastic dominance and second order stochastic dominance

1. Stochastic Dominance Consider the following investments: Investment 1 Investment 2 Payoff 1 7 12 Prob. 0.25 0.50 0.25 Payoff 3 5 8 Prob. 0.33 0.33 0.34 Check that neither investment dominates the other on the basis of The Mean-Variance criterion First Order Stochastic Dominance Second Order Stochastic Dominance How could you rank these investments ? 1. Stochastic Dominance Consider the following investments: Investment 1 Investment 2 Payoff 1 7 12 Prob. 0.25 0.50 0.25 Payoff 3 5 8 Prob. 0.33 0.33 0.34 Check that neither investment dominates the other on the basis of The Mean-Variance criterion First Order Stochastic Dominance Second Order Stochastic Dominance How could you rank these investments