Mark Has Two Job Offers When He Graduates from College

Multiple Choice

Mark has two job offers when he graduates from college. Mark views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $50,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $60,000. Mark believes that he has a 50-50 chance of earning the bonus. If Mark takes the offer that maximizes his expected utility and is risk-neutral, which job offer will he choose?

A) Mark will take the first offer.
B) Mark will take the second offer.
C) Mark is indifferent between the offers-both yield the same expected utility.
D) Indeterminate from the given information.