1. Beginning three months from now, you want to be able to withdraw $2,800 each quarter from your bank account to cover college expenses over the next four years. If the account pays .50 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years?
2. What is the value of a bond that has a par value of $1,000, a coupon rate of 9.28 percent (paid annually), and that matures in 17 years? Assume a required rate of return on this bond is 12.85 percent.
3. You believe to have a good forecasting ability about changes in return in the market, and you are using it in managing a portfolio. Does that fall into tactical asset allocation or strategic asset allocation? Explain.