1. Discuss one or two common market anomalies or fallacies and your impressions of their validity.
2. A lottery claims their grand price is $10 million, payable over 20 years at $500,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%. Lay out 20 cashflows in excel and discount each one using an interest rate of 0.06 (remembering that the first cashflow is immediate).
3. You deposite 100,000 cash in a brokerage account and purchase 200,000 of stocks on margin by barrowing 100,000 from your broker. later the value of your stock holdings fall to 150,000. what is your account margin in percent?