The reserves from 2022 policy year losses have been increased to $22.5 million to reflect adverse loss development. Update the present values for the investment options below as of 2023 year-end (start of 2024) loss development and updated reserves.

Option 1: Preferred stock portfolio that is expected to yield constant, composite dividends of $150,000 annually at a 7.5% discount rate, and assuming A-S plans to sell its position in the portfolio five years from now

Option 2: Mutual fund portfolio that is expected to yield growing, composite dividends at a growth rate of 2.5%, with a 7.5% discount rate, and assuming A-S plans to sell its position in the portfolio five years from now

Option 3: Money market securities that are expected to yield an average 5% return, compounded annually, for five years