a.) suppose you win the lotto for 1,000,000.00. After paying taxes the lottery administrators offer you two payout options: option one receive 750,000 today or option two receive 900,000 in three years. Assume the market interest rate is 4%. What option will you choose?

b.) Consider a 10 year coupon bond bought by an investor in the primary market for $1000. The bond pays a coupon payment of $35, and has a face value of $1000. If the bond is held to maturity by the original investor, what is the yield to maturity of the bond?

c.) Consider a 4 year bond. The coupon payment is $25, face value is $1000, and the current market interest rate is 4%. Calculate the price of the bond.

d.) Consider a one year discount bond with a face value of 1000, and a yield to maturity of 5%. What price will the bond sell at?