Investments A and B both cost $100,000 and each promises a single payoff in one year.The distribution of payoffs for each investment appears below.
Ignoring possible differences in nondiversifiable risk,which investment would a risk-averse investor prefer,and why?
Definitions:
Lumen
The interior space or cavity of a tubular structure, such as a blood vessel or intestine, through which liquids and substances move.
Semen
The fluid that is ejaculated from the male reproductive system and contains sperm and other substances that aid in fertilization.
Seminal Vesicles
glands in males that secrete fluid that partly composes the semen.
Prostate Gland
A gland in the male reproductive system that surrounds the neck of the bladder and urethra, producing a fluid that is a component of semen.
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