1. After one year living in a university residence, Mary-Beth decides to rent an apartment for the remaining 3 years of her degree. She has found a place that will cost $550 per month; rent for the first and last month must be paid up front. How much money would Mary-Beth need to have in her bank account right now to be sure she will always have enough for rent? Bank account pays 4.5% interest, compounded monthly.
2. An investor has put money in four stocks in the dollar amounts indicated and with betas specified. What is the portfolio beta? Stock A $3,456 with a beta of 1.27; stock B $7,148 with a beta of 1.13; stock C $4,151 with a beta of 0.93; and stock D $7,704 with a beta of 1.31. Show your answer rounded to two decimal points.