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Table 22-1
Three Friends-Stephanie, Stella, and Lydia-Are Deciding Where to Go

question 24

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Table 22-1
Three friends-Stephanie, Stella, and Lydia-are deciding where to go together for vacation. They all agree that they should go to one of the three places: Italy, Spain, or Hawaii. They also agree that they will have two pairwise votes to determine where to go on vacation, with the majority determining the outcome on each vote. The first, second, and third choices for each person are as indicated in the following table.


 Stephanie  Stella  Lydia  First choice  Italy  Spain  Hawaii  Second choice  Spain  Hawaii  Italy  Third choice  Hawaii  Italy  Spain \begin{array} { | c | c | c | c | } \hline & \text { Stephanie } & \text { Stella } & \text { Lydia } \\\hline \text { First choice } & \text { Italy } & \text { Spain } & \text { Hawaii } \\\hline \text { Second choice } & \text { Spain } & \text { Hawaii } & \text { Italy } \\\hline \text { Third choice } & \text { Hawaii } & \text { Italy } & \text { Spain } \\\hline\end{array}
-Refer to Table 22-1. If the first vote pits Italy against Hawaii and the second vote pits Spain against the winner of the first vote, then the outcome is as follows:

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The risk that the value of an investment will decrease due to a change in interest rates.

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The weighted average time it takes for an investor to receive all cash flows from a bond or a portfolio of bonds, factoring in the present value of those cash flows.

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A type of annuity that lasts forever, providing payments that continue indefinitely.

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