You win a lottery price. Which of the following options to receive the payment would you choose if your annual rate of discount is 10%

a $1 for the next 5 years
	b.	$2 million today and $5 million in 3 years
	c.	$5 million today
	d.	$ 7 million in 5 years

Suppose you borrow at the risk-free rate an amount equal to your initial wealth and invest in a portfolio with an expected return of 8 percent and a standard deviation of returns of 10 percent. The risk-free asset has an interest rate of 3 percent. Calculate the standard deviation on the resulting portfolio.

	a.	20%
	b.	Not enough information because we do not know the correlation.
	c.	7%
	d.	10%

1. John expects to retire in 30 years, and he wishes to accumulate $3,000,000 in his retirement fund by that time. If the rate of return is 9 percent per year, what constant amount should John put into his retirement fund each year in order to achieve this goal? (Assume that he makes payments at the end of each year.)

   	a.	$13,626.05
   	b.	$25,500.00
   	c.	$22,009.05
   	d.	$18,418.29

Assuming all else constant, a bond will be selling at _____ when the yield to maturity is _____ the coupon rate.

a.	a discount; greater than
	b.	a premium; greater than
	c.	at par; less than
	d.	a premium; equal to