Explain the investment opportunities

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Reference no: EM133205525

Are you risk averse? 

Let us say you are presented with the following investment opportunities. Which of the two do you prefer?

1. Invest $10K now and one year from now flip a coin: if "head" you pocket $50K, if "tail" you *pay* an additional $20K

2. Invest $10K now and receive $15K in a year. 

Explain your choice.  Please note that there is not right or wrong answer.  Attitude towards risk varies from an individual to another.

Reference no: EM133205525

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