Lottery Winners Who Take the Lump-Sum Payouts Instead of Payments

question 72

Multiple Choice

Lottery winners who take the lump-sum payouts instead of payments spread out over many years

• A)believe the rate of return they could find in other financial assets is less than that implied in the extended payout.
• B)sacrifice free money and are making an economically irrational decision.
• C)prefer immediate to delayed returns.
• D)are only making a rational economic decision if there is rapid inflation.