Question: Amanda is considering whether to put $ 1 , 0 0 0 in her savings account at an annual interest rate of 1 percent or
Amanda is considering whether to put $ in her savings account at an annual interest rate of percent or purchase $ worth of stock in BigCorp. If she puts $ in her saving account, then at the end of the year, she'll have $ for certain. If she buys stock in BigCorp, then at the end of the year, there's a percent chance she'll have $ a percent chance she'll have $ and a percent chance she'll have $
If Amanda is risk averse, then she will
put $ in her savings account.
put some of her money in savings and use the rest to buy stock in BigCorp.
purchase $ worth of stock in BigCorp.
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