Q Pop Quiz #3 1. Based on Mankiw's Why It Matters: Can Investors Outperform the Magic 8-Ball? in Ch 27, what is the answer from the Magic 8-Ball for the stock market predictions over the next year? 2. From the Concept Clip: Present Value and Time Value of Money in Ch 27, why do you have to discount future value? 3. List three different ways to lend your money described in Concept Clip: Future Value in Ch 27. 4. Suppose you have an investment opportunity that costs you $130,000 today and will yield payoffs of $50,000 at the end of the 2nd year, 3rd year, and 4th year. Will you invest your $130,000 in this investment opportunity today if the interest rate is 10%? Your answers should include the calculations as well as the final answer. Video Problem Walk-Through: Computing the Present Value of a Firm’s Investment Project in ch 27 will show you step-by-step solution guidelines for this question. 5. Suppose you have just won a lottery. The lottery is going to pay you $2 million per year at the end of the next three years. Alternatively, the lottery offers to pay you $4.5 million in one lump sum today. Will you accept the lump-sum payment today if the interest rate is 20%? Your answers should include the calculations as well as the final answer. Video Problem Walk-Through: Determining Whether to Take Your Lottery Winnings Over Time or in One Lump-Sum Payment in ch 27 helps you figure out how to solve this calculation question.