Question $1(1\mathrm{.}5$ points$)$

If presented with the option between two equally risky annuities, each disbursing $$10,000$ annually over fifteen years, one being

an annuity due and the other a regular annuity, a rational, wealth$-$maximizing investor would likely choose which of the options?

The regular annuity.

Either option is viable since they both have the same present value according to

the problem's setup.

Lacking the appropriate interest rate, it is impossible to determine the value of

the two annuities, and therefore, we cannot ascertain which one is preferable.

In this case an annuity due, but, if both payments were increased to $$30,000,$

the regular annuity would become the preferred option.

The annuity due.