A Famous Athlete Is Awarded a $9 Million Contract That

question 11

Multiple Choice

A famous athlete is awarded a $9 million contract that stipulates equal payments to be made monthly over a period of five years. To determine what lump sum has the same value as the contract today, you would need to use:

• A) present value factors
• B) future value factors
• C) present value factors of an annuity
• D) future value factors of an annuity

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding two or more conflicting cognitions (beliefs, attitudes, or values).

Free Association

A psychoanalytic technique in which a patient says whatever comes to mind without censorship as a way to uncover unconscious thoughts or feelings.

Meditation

A practice where an individual uses a technique – such as mindfulness, or focusing the mind on a particular object, thought, or activity – to train attention and awareness, and achieve a mentally clear and emotionally calm and stable state.

Chronic Pain

A persistent pain that lasts weeks to years, often in spite of treatment or therapy.