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4) You win an OLG scratch lottery today and are presented with the following three options to receive your prize. (6 marks total) Option A:

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4) You win an OLG scratch lottery today and are presented with the following three options to receive your prize. (6 marks total) Option A: $13,000 end of quarter payments for 10 years. Option B: A lump sum payment of $170,000 in 2 years and another lump sum payment of S250,000 in 4 years from today. Option C: S4,850 beginning of the month payments for 10 years, BUT starting in exactly 12 years from today. (Deferred Annuity) Which option is best (highest) using DCF if interest rates are 4% compounded annually? 4a) DCF for Option A 4b) DCF for Option B 4c) DCF for Option C

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