Suppose You Win a Small Lottery and You Are Given

question 31

Multiple Choice

Suppose you win a small lottery and you are given the following choice: You can receive (1) an immediate payment of $10,000 or (2) two annual payments,each in the amount of $5,200,with the first payment coming one year from now,and the second payment coming two years from now.You would choose to take the immediate payment of $10,000 if the interest rate is

• A)2 percent,but not if the interest rate is 1 percent.
• B)3 percent,but not if the interest rate is 2 percent.
• C)4 percent,but not if the interest rate is 3 percent.
• D)5 percent,but not if the interest rate is 4 percent.

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Definitions:

Hippocampus

A region of the brain important for learning and memory formation.

Prefrontal Cortex

The front part of the frontal lobe of the brain, associated with complex cognitive behavior, personality expression, and decision making.

Temporal Lobes

Regions of the brain located on either side of the head above the ears, involved in processing auditory information and associated with memory and emotion.

Adolescent Suicide

The act of intentionally taking one's own life during the period of adolescence, often due to psychological or environmental stressors.