1. Education Plus financial services is offering education savings plan. The plan calls for you to make eight annual payments of $5,000 each, with the first payment occurring today, your child's 10th birthday. Beginning on your child's 18th birthday, the plan will provide $18,000 per year for four years. What return is this investment offering?
a. 9.96%
b. 18.12%
c. 16.69%
d. 14.38%
e. 12.11%
2. An investor is given the following information about two stocks returns.
The investor in interested in investing 50% of his resources in stock 1 and 50% in stock 2.
What is standard deviation of the portfolio given that the coefficient of correlation between the two stocks is -0.2?
a. (0.11)0.5=0.332
b. (0.18)0.5=0.424
c. (0.01665)0.5=0.129
d. (0.0135)0.5=0.116