Which of the following rates of return is the best estimate of the discount rate (interest rate) appropriate for calculating the present value of a series of payments made under a promised 10-year long lottery payout from a State lottery?

Select one:

a. the rate of return on an FDIC insured bank CD with a maturity of 3 months

b. the rate of interest on a 10-year State bond

c. the rate of return on a high quality 10-year corporate bond

d. the rate of return on a well diversified portfolio of publicly traded stocks

e. the rate of change in the size of the balance sheet of the Federal Reserve