Eva is risk-averse. Currently she has $50,000 to invest. She faces the following choice: she can invest in the stock of a dot-com company, or she can invest in IBM stock. If she invests in the dot-com company, then with probability 0.5 she will lose $30,000, but with probability 0.5 she will gain $50,000. If she invests in IBM stock, then with probability 0.5 she will lose only $10,000, but with probability 0.5 she will gain only $30,000. Can you tell which investment she will prefer to make?