15. According to the principles of finance laid out by the textbook, investors require additional for taking on additional risk. a. Variance b. Time value c. Agency costs d. Returns 16. Congratulations! You have just won your state's local lottery. The lottery will pay out $1,000,000 at the end of each year for the next 25 years. While the Lottery Commission refers to this as a $25,000,000 jackpot, if you choose the "cash option" they will give you much less than that; you can receive a lump sum payment today equal to the present value of the ordinary annuity instead of the 25 annual payments. If the discount rate that the Lottery Commission uses to determine the lump sum payoff is 7.5%, what is your payoff if you select the cash option? a. $9,147,286.58 b. $11,146,945.86 c. $16,481,514.59 d. $19,072,715.05 17. You have just been hired on as a new financial analyst for a prestigious investments firm. After consulting with the firm's resident retirement planner, you decide to begin contributing $ 2400 at the end of each year into your Roth IRA. You expect the account will generate 10.9% in returns per year for the foreseeable future (compounded annually). How much will be in the account after 48 years of investing? a. $2,019,272.66 b. $3,136,613.13 .C. $4,326,904.52 d. $5,883,417.86