Suppose Carlos Has a 60 Percent Chance of Not Collecting

question 46

Multiple Choice

Suppose Carlos has a 60 percent chance of not collecting $100,000 when his rich uncle dies in 10 years.Juanita wants to buy the rights to this possible inheritance from Carlos.How much is the possible inheritance currently worth to Carlos? Assume the interest rate is 9 percent.

• A)$94,695.
• B)$25,345.
• C)$16,896.
• D)$142,042.

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Definitions:

Schizophrenia

A chronic and severe mental disorder that affects how a person thinks, feels, and behaves, often characterized by delusions, hallucinations, and cognitive issues.

Hallucination

A perception in the absence of external stimulus that has qualities of real perception; hallucinations are vivid, substantial, and located in external objective space.

Delusions of Persecution

False beliefs that one is being harassed, cheated, or persecuted, often found in paranoid schizophrenia.

Organic Dysfunctions

Disorders caused by organic changes or damage in the brain, leading to psychological symptoms.