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Suppose your neighbor just got a $1 million jackpot of state lottery. She was offered the following two options. If the current 20-year Treasury yield
Suppose your neighbor just got a $1 million jackpot of state lottery. She was offered the following two options. If the current 20-year Treasury yield 2.5%, which option would you recommend her to choose? Why?
Option 1: Receive $50,000 for the next 20 years.
Option 2: Receive a lump sum cash amount of $470,000 and purchase 20-year US T-bond for the amount.
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