1. What is the monthly payment for the following mortgage? Loan amount: $50,000 30 years to maturity Interest rate: 12%
a. $514.30 b. $485.91 c. $500 d. $477.86 e. $466.09
2. You have the following information for Stock A and Stock B:
Expected rate of return:
Stock A: .12
Stock B: .06
Standard deviation:
Stock A: .50
Stock B: .30
Correlation between the two stocks: .4
If you invest $2,000 and $8,000 in Stock A and Stock B respectively, what is the standard deviation of the portfolio?
a. .4799
b. .1131
c. .2946
d. .5110
e. .6013