1. Olivia Puckett would like to save up to pay for a vacation to Italy with her friends. The trip is expected to cost $6,000.00 and she needs this money in three years. She has found an investment account that would earn 5% on an annual basis. What sum of money must she invest now to get to the $6,000.00 in 3 years?
A) $5,183.03
B) $5,175.65
C) $6,000.00
D) $8,433.21
2. The capital market line:
and the characteristic line are two terms describing the same function.
intersects the feasible set at its midpoint.
has a vertical intercept at the risk-free rate of return.
has a horizontal intercept at the market beta.
lies tangent to the opportunity set at its minimum point.