After Winning the Lottery, You Are Indifferent Between Receiving $750,000

question 209

Multiple Choice

After winning the lottery, you are indifferent between receiving $750,000 end-of-the-year payments for 15 years or a lump-sum payment of $7,106,223 today. At what interest rate would you be
Indifferent between the two options?

• A) 5.48%
• B) 6.38%
• C) 7.28%
• D) 8.18%
• E) 9.27%

---

Definitions:

Conspiracy Doctrine

A legal principle that defines agreement between two or more parties to commit an unlawful act or a lawful act in an unlawful manner.

Unlawful Conspiracies

Refers to agreements or plans made in secret, often between competitors, to perform actions that are illegal or deceptive.

Landrum-Griffin Act

A 1959 U.S. law aimed at protecting union members from corrupt practices of their own unions by establishing certain democratic procedures within unions and regulating union affairs.

Political Lobbying

The act of attempting to influence decisions made by officials in the government, often by special interest groups.