Suppose there are two farms A and B. Each of them is expected to bring an income of $100,000 in one year from now. The only difference between farm A and B is that A is more likely to be affected by drought and weather conditions, so the expected income of A is less secure than that of B. According to the above information, we know that the PV of A equals the PV of B the PV of A is greater than the PV of B the discount rate for A equals the discount rate for B the discount rate for A is greater than the discount rate for B