(Answered) Sam after taking a 200 loan from the bank to finance an

Economics

Sam, after taking a $200 loan from the bank to finance an investment that pays $1000 50% of the time and $0 50% of the time at a 100% interest, discovers another riskier investment that pays out $5000, but only 10% of the time, while the other 90% of the time it pays zero. Would he want to switch to the riskier investment? yes because his return has increased? no because his libailty to the bank as increased? no because his return has decreased? none of the above

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