Suppose that Chris has won a lottery and is evaluating the following three alternatives to receive

the prize money:

Option $1$ Receive $$211,000$ today

Option $2$ Receive $$234,000$ in one year from today

Option $3$ Receive $$111,000$ today and $$110,000$ in one year from today

The capital market works frictionlessly so that Chris can borrow and lend at a rate of $10\%$ per year

without restrictions. Which of the following statements is correct? Choose only one

$*$Note: For Question $4,$ you are not required to show the calculation in your answer sheet, although some

calculation will be necessary for you to find the correct answer.

a$)$ Even though he prefers the option with the highest amount in terms of the present value,

Chris must select Option $1$ because he needs $$200,000$ today.

b$)$ If he prefers the option with the highest amount in terms of the present value, Chris must

select Option $2.$

c$)$ If he prefers the option with the highest amount in terms of the present value, Chris must

select Option $3.$

d$)$ He must be indifferent across the three options given.

Answer: