1. You're trying to save to buy a new $150,000 Ferrari. You have $44,000 today that can be invested at your bank. The bank pays 5.5 percent annual interest on its accounts. How long will it be before you have enough to buy the car?
2. You have just received notification that you have won the $4.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 80 years from now. What is the present value of your windfall if the appropriate discount rate is 12 percent?
3. A stock has an expected return of 14 percent, its beta is 0.85, and the risk-free rate is 9.1 percent. What must the expected return on the market be?