Suppose Interest of 5% Each Year for Two Years Can

Multiple Choice

Suppose interest of 5% each year for two years can be earned on $1,000 saved today with no risk. What is the least amount a person would need to have a 50% chance of winning to be willing to face a 50% chance of losing $1,000 today and be considered risk averse?

A) $907.03 to be paid in two years
B) $1,000.01 to be paid in two years
C) $1,100.01 to be paid in two years
D) $1,102.51 to be paid in two years