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lbert and Barney each win the lottery. Both are offered the same two options, a fixed annuity payment for 15 years or a single lump
lbert and Barney each win the lottery. Both are offered the same two options, a fixed annuity payment for 15 years or a single lump sum payment today. Albert chooses the annuity, while Barney chooses the single lump sum payment. If both chose the option with the highest present value, what must be true about Albert and Barneys required returns?
Not enough information to decide |
Albert required return = Barney required return |
Albert required return > Barney required return |
Albert required return < Barney required return |
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