1. Find the present value of the following ordinary annuities:
a) $400 per year for 10 years at 10%
b) $200 per year for 5 years at 5%
c) $400 per year for 5 years at 0%
d) Now rework parts a,b,c assuming that payments are made at the beginning of each year; that is, they are annuities due.
2. What is one significant problem with attempting to evaluate future cash inflows or outflows?
3. Should the government regulate derivatives more than they do now? If so, why?