Suppose that Chris has won a lottery and is evaluating the following three alternatives to receive the prize money: Option 1 Receive $200,000 today Option 2 Receive $220,000 in one year from today Option 3 Receive $170,000 today and $44,000 in one year from today Chris prefers the alternative that offers the highest value in terms of the present value. If 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.

a) If Chris needs $200,000 today, Option 1 is the best.

b) Option 2 is the best because it offers the highest in terms of the present value.

c) Option 3 is the best because it offers the highest in terms of the present value.