1. Suppose you own a single stock, which over the past year has had a mean daily return of 0.25% with a variance of 0.64%. What is the daily 10% Value at Risk of this portfolio? Interpret the result in words.
2. You have found three investment choices for a? one-year deposit: 10.7% APR compounded? monthly, 10.7% APR compounded? annually, and 10.0% APR compounded daily. Compute the EAR for each investment choice.? (Assume that there are 365 days in the? year.) ?(Note: Be careful not to round any intermediate steps less than six decimal? places.)
3. For a nominal interest rate of 10% and inflation of 3%, according to the Fisher Effect, what would be the approximate real rate?