1. As a new employee in the Lottery Commission, your first job is to design a new prize. Your idea is to create two grand prize choices: (1) receiving the lump sum of $1 million at the end of year 5, or (2) receiving $500,000 today followed by a lump sum amount at the end of year five. Using an interest rate of 8%, which of the following comes closest to the amount prize (2) needs to pay at the end of year five in order for both prizes to have the same present value?

	a.	$265,336
	b.	$1,000,000
	c.	$333,333
	d.	$500,000
	e.	$680,580

2. Simon and Simon, makers of cell phones, has a history of paying a dividend of $1.00 per share to their shareholders. Which of the following describes the likely response to the per share price of Simon and Simon with respect to the dividend?

	a.	The stock price will rise by $1 on the ex-dividend date
	b.	The stock price will fall by more than $1 on the record data
	c.	The stock price will not rise nor fall on any of these dates
	d.	The stock price will fall by $1 on the ex-dividend date
	e.	The stock price will rise by more than $1 on the record date