1. An investment yields a cash flow of $2000 in years 1 & 2, and in 3-5 years an annual cash flow of $1000. Using a 10% discount rate, what is the total present value of these flows?

2. If a correlation coefficient for two variables X&Y is 0.60 which of the following statements made based on this information?

a.This correlation indicates a positive covariance between the two variables

b.this correlation indicates that a regression of wine on X will have a positive slope

c.this correlation is significantly different from zero

d.this correlation indicates a positive relation between the two variables