1. ND Electric Company has 6-year bonds outstanding, 6 percent coupon rate paid semiannually, and a yield to maturity of 7 percent. If the yield to maturity remains at its current rate, what will the price be 2 years from now?
A) 965.6 B) 795.8 C) 912.6 D) 882.1
2. What is the portfolio beta if 75% of the portfolio is invested in a stock mutual fund (that has the same beta as a market portfolio) and the rest invested in a riskless asset?
A) 0.25
B) 0.50
C) 0.75
D) 1.00