1. Now that you are taking FIN 311 you know that you should invest some money each month from now until you retire. What amount do you need to invest at the end of each month if you want to have $2,000,000 at the end of 35 years, and you can earn a rate of 7.5% (compounded monthly)? Show your calculator or Excel inputs for partial credit.

2.

What is the main advantage to hedging risk using futures contracts to buy or sell a currency at point in the future at a given rate?

		You can lock in today's (spot) exchange rate.
		You can always make money on the contract.
		You can lock in a fixed exchange rate at the forward rate.
		The forward rate will be better than the spot rate at the time when you are ready to complete the purchase or sale of currency.

3.

Which of the following statements is CORRECT regarding TVM Time Lines?

	a.	Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly.
	b.	Some of the cash flows shown on a time line can be in the form of annuity payments, but none can be uneven amounts.
	c.	A time line is not meaningful unless all cash flows occur annually.
	d.	Time lines are useful for visualizing complex problems prior to doing actual calculations.
	e.	Time lines cannot be constructed for annuities where the payments occur at the beginning of the periods.