How will you receive your money if you are risk taker

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Reference no: EM131820574

You have three choices to receive the $450,000,000 winnings:

A. A single cash payment of $175,382,998

B. Annual payments of $23,677,953 for 15 years

C. Payments of $15,000,000 for five years; $80,000,000 in the 6th year; and $20,000,000 for 10 years.

Money can be invested at 7.48% but this investment carries a moderate amount of risk. Returns on the stock market are 12.65% but last year, the return was 4.75%. Investment in US Treasury Bonds pays 3.5% and Treasury Bills pay 2.75%.

How will you receive your money if you are risk averse?

How will you receive your money if you are a risk taker?

Reference no: EM131820574

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