Question: You have just won 50 million in a lottery and

You have just won $50 million in a lottery and are offered two options: receive $40 million today or receive $5 million per year for the next 10 years. At what interest rate are you indifferent to the choice between the two options? If the interest rate is greater than the indifference rate, which do you prefer and why? If the interest rate is less than the indifference rate, which do you prefer and why?


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  • CreatedFebruary 25, 2015
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