1. The market allocates capital to firms based on all of the following except:
A. Higher risk requires lower returns due to higher expectations
B. The level of efficiency
C. Expected returns
D. The degree of past performance
2. You just won the $105 million Ultimate Lotto jackpot. Your winnings will be paid as $3,500,000 per year for the next 30 years. If the appropriate interest rate is 6.8 percent, what is the value of your windfall?
$42,102,751.99
$45,795,975.84
$47,332,356.97
$43,832,356.97
$44,318,686.30