1. If your were to borrow $8,400 over five years at 0.14 compounded monthly, what would be your monthly payment?

2. A dollar to be recieved in the future is worth more than a dolar in hand today? True or false

3. Why might a person be interested in calculating the covariance for two stocks?

a. the result indicates how far each stock is in distance from the mean.

b. the result indicates the systematic risk found in each stock.

c. the result indicates how the two stocks move together in the market.

4. Use the following information to calculate your company's expected return.

state	probability	return
boom	20%	0.18
normal	60%	0.10
recesion	20%	-0.16