2. If you win a state lottery ticket that pays you $1 mil at the end of ten years, what...

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2. If you win a state lottery ticket that pays you $1 mil at the end of ten years, what will an investor likely be willing to pay you to buy that ticket today? Assume it has almost no default risk and would be an investment comparable to 10-year Treasury bond.

 

3. If an investor was able to purchase the winning lottery in #2 above today for $500,000, what will be the annual rate of return earned by the investor?

 

 

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