Question: I need Answer As soon as possible please Question Al (8%) When facing the choice between A: losing f10,000 with certainty and B: losing $400,000

I need Answer As soon as possible please Question Al (8%)

I need Answer As soon as possible please

Question Al (8%) When facing the choice between A: losing f10,000 with certainty and B: losing $400,000 with a chance of 1% plus losing f10,000 with 50% chance, Donald chooses A. When facing the choice between C: losing f400,000 with a chance of 1% and D: losing $10,000 with a chance of 50%, he chooses D. Do Donald's choices reflect the Allais Paradox? Question A2 (8%) When faced with a choice between a prospect A that incurs a loss of f10,000 with a chance of 50% and a loss of f400.000 with a chance of 1% on the one hand, and a sure loss B of f10,000 on the other, Kim chooses the latter (sure loss of f10T). a) Does Kim show risk averse or risk seeking preferences? (5%) b) Can Prospect Theory explain this behaviour? (3%)

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