Which of the following two investments would a risk seeker choose: Investment A with an expected outcome of $1,000 and standard deviation of $500, or Investment B with an expected outcome of $1,000 and standard deviation of $200?

Select one:

a. Investment A because if Investment B is chosen the expected utility from the increase in spread of expected returns below $1,000 outweighs the expected utility from the increase in spread of expected returns above $1,000.

b. Investment A because it offers the chance of more wealth.

c. Investment A because the downside risk is greater.

d. Investment B because the downside risk is less.