1. Given compounding, which rate of return is the highest? Thanami a). b. 3% compounded...

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1. Given compounding, which rate of return is the highest? Thanami a). b. 3% compounded quarterly c. 12% compounded annually 112 4 They are all equivalent 2. Assuming that premiums are constant across all time horizons. When evaluating the investment options below, what is the default risk premium? a. 0.5% b. 1.0% culthe 21 c. 1.5% (d.) We do not have enough information ?! 3. A lottery winner is given the choice of receiving $1,000,000 lump sum amount today or a $10,000 monthly/perpetuity starting in the current month. What is the monthly required rate of returnthat would make the individual choose the lump sum amount? a. r>1% (b.) r

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