1. Suppose you inherited $700,000 and invested it at 6% per year. How much could you withdraw in equal amounts at the beginning of each of the next 20 years?
a) $67,543.38 b) $57,574.71 c) $99,230.40 d) $83,386.89 e) $97,562.66
2. According to the expectations theory, if the 1-year rate is 2.5% and the 2-year rate is 3.64%, the expected 1-year rate would be
a) 3.80%. b) 4.80%. c) 5.80%. d) 6.80%.