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We now have $45.000 in assets and are given a choice between investment 1 and investment 2. With investment 1. 60% of the time we

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We now have $45.000 in assets and are given a choice between investment 1 and investment 2. With investment 1. 60% of the time we increase our asset position by $255.000, and 40% of the time we increase our asset position by $85,000. With investment 2.45% of the time we increase our asset position by $560,000, and 55% of the time we increase our asset position by $5.000. Our utility function for final asset position is uc). We are given the following values for ux): (O) = 0. (640.000) = .80, (810.000) =.90.1(O)= 0, (90.000) = .30. (1,000,000) = 1. (490,000) = 7. a) Are we risk-averse, risk-seeking, or risk-neutral? b) Will we prefer investment 1 or investment 27

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