1. Mr House has taken a 20-year, 250,000 mortgage on his house at an interest rate of 6 per cent per year. What is the remaining balance (or value) of the mortgage after the payment of the fifth annual installment? a. 128,958.41 b. 211,689.53 C. 141,019.50 d. 248,719.21 2. Driscoll Company is considering investing in a new project. The project will need an initial investment of 2,400,000 and will generate 1,200,000 (after-tax) cash flows for three years. What is the project's IRR? a. 14.5 % b. 18.6 % C. 20.2% d. 23.4 % 3. The correlation coefficient between a stock and the market portfolio is +0.6. The standard deviation of return of the stock is 30 percent and that of the market portfolio is 20 percent. Calculate the beta of the stock. a. 1.1 b. 1.0 C. 0.9 d. 0.6 4. Suppose you invest equal amounts in a portfolio with an expected return of 16 % and a standard deviation of returns of 18 % and a risk-free asset with an interest rate of 4 %. Calculate the standard deviation of the returns on the resulting portfolio. a. 8 % b. 10 % C. 20% d. 9%