# Cameron is an investor trying to decide among the following three different investment options. Option A: Price today:

Cameron is an investor trying to decide among the following three different investment options. Option A: Price today: \$1000One year from today Cameron will receive one of the following payments\$1,250 with a probability of 90%\$1,000 with a probability of 8%\$0 with a probability of 2%Option B:Price today: \$1000One year from today Cameron will receive one of the following payments\$4,000 with a probability of 30%\$1,000 with a probability of 50%\$0 with a probability of 20%Option C:Price today: \$1000One year from today Cameron will receive one of the following payments\$2,000 with a probability of 33%\$1,000 with a probability of 34%\$0 with a probability of 33%a. What is the expected value (payment) of each of the options at the end of the year?b. Which of the options has the highest risk? Why?c. If Cameron is a risk neutral inventor, which option will be selected?