John Doe Wins the Lottery and May Pick from the Following

question 106

Multiple Choice

John Doe wins the lottery and may pick from the following three choices: Assume that John Doe uses a discount rate of 5% to evaluate his choices. If he selects the second option, how much is the present value of that alternative?

• A)$614,000
• B)$1,000,000
• C)$750,000
• D)$798,000

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Definitions:

Section 11

A specific section in various legal documents or statutes that might encompass different regulations or requirements depending on the context.

1933 Securities Act

A U.S. law that regulates the offer and sale of securities to protect investors from deceit, misrepresentations, and other fraud.

Privity

A legal concept indicating a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty.

Due Diligence

The investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract.