You have three choices to receive the $450,000,000 winnings:
A. A single cash payment of $175,382,998
B. Annual payments of $23,677,953 for 15 years
C. Payments of $15,000,000 for five years; $80,000,000 in the 6th year; and $20,000,000 for 10 years.
Money can be invested at 7.48% but this investment carries a moderate amount of risk. Returns on the stock market are 12.65% but last year, the return was 4.75%. Investment in US Treasury Bonds pays 3.5% and Treasury Bills pay 2.75%.
How will you receive your money if you are risk averse?
How will you receive your money if you are a risk taker?