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:

Emotion Control

The process of managing and regulating one's emotions to adapt to circumstances and achieve more effective responses.

Compulsion

A psychological condition characterized by the urgent need to perform certain behaviors or rituals repetitively, often a symptom of obsessive-compulsive disorder.

Obsession

Persistent and intrusive thoughts or impulses that cause distress or anxiety, often a symptom of obsessive-compulsive disorder (OCD).

Regression

Psychological defense mechanism in which a person falls back on childlike patterns of responding in reaction to stressful situations.