A company is considering two different investments, A and B, which have different levels of risk. Investment A has a 60% chance of earning a profit of $10,000 and a 40% chance of losing $2,000. Investment B has a 30% chance of earning a profit of $20,000 and a 70% chance of losing $5,000.

a) What is the expected value of each investment?
b) Which investment has the higher risk?
c) Which investment would you recommend and why?

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