1. You just won the state lottery!!!! The state gives you the choice of $1,000,000 today or a 10-year annuity of $120,000, with the first payment coming one year from today. What rate of return is built into the annuity?
A. 2.00%
B. 1.24%
C. 20.00%
D. 3.46%
E. More information is needed to find the answer
2. A crude oil call option has an exercise price of $40 when its spot price is $44. If the call option is trading at $6.65, what is its intrinsic value?
a. $0
b. $4.00
c. $40.00
d. $44.00
e. $46.65