If you were to choose the investment that maximizes pauls


Paul wants to choose one of the two investment opportunities over three possible scenarios. Investment 1 will yield a return of $10,000 in Scenario 1, $2,000 in Scenario 2, and a negative return of -$5,000 in Scenario 3. Investment 2 will yield a return of $6,000 in Scenario 1, $4,000 in Scenario 2, and zero in Scenario 3. The probability for Scenario 1 is 0.2, for Scenario 2 is 0.3, and for Scenario 3 is 0.5.

Part 1) If you were to choose the investment that maximizes Paul's Expected Money Value (EMV), then you should choose __________.

A. Investment 1

B. Investment 2

C. Indifferent

Part 2) If Paul is uncertain about the return for Investment 1 in Scenario 1, then this return has to be ______________ dollars in order to make Paul indifferent between these two investments (i.e. the two investments would have the same EMV.) (Please only enter an integer and include no units.)

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Financial Management: If you were to choose the investment that maximizes pauls
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