Suppose we have the followings:
lottery A = ($1, 1 2 ; $2, 0; $3, 0; $4, 1 2 ; $5, 0).
lottery B = ($1, 0; $2, 1 4 ; $3, 1 4 ; $4, 0; $5, 1 2 ).
a. Determine and graph the cumulative distribution functions (CDF) of lottery A and lottery B. (Label all the important points.)
b. Which statement is true? (Must show your reasoning.)
1: Lottery A stochastically dominates lottery B.
2: Lottery B stochastically dominates lottery A.
3: Neither