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Trump enterprises has a 75% chance of going bankrupt in the next 2 weeks. The CEO of the company must decide how to invest the

  1. Trump enterprises has a 75% chance of going bankrupt in the next 2 weeks. The CEO of the company must decide how to invest the companys remaining free cash flow. There are two assets available, and Trump can only invest in one of these assets. Asset A generates $10 with a probability of and $10 with a probability of . The performance of Asset B is perfectly correlated with the survival of Trump enterprises, and with a chance, Asset B pays $100 and with a chance it loses $100 (and Trump goes bankrupt). From the perspective of the CEO, what is the ratio of the expected payoffs from investing in B relative to A?

    1

    -5

    10

    50

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