1. Overall asset allocation for a portfolio is performed using the expected returns, ________________, and correlations between asset classes.
A) Weighted average returns
B) Standard deviation
C) Beta
D) Covariance
2. What is the discount yield, bond equivalent yield, and effective annual return on a $5 million commercial paper issue that currently sells at 98.625 percent of its face value and is 136 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places.(e.g., 32.161))
Discount yield %
Bond equivalent yield %
Effective annual return %