1. The spot rate for year 1 is 7.5% and the forward rate for year one to two is 8%. The two-year discount factor is: (a) 0.845. (b) 0.861. (c) 0.852. (d) 0.888. (e) 0.874. ???????????? 1. A portfolio consists of 40% in Security A and 60% in Security B. The covariance matrix for A is 144, 225; for B is 225, 81. The standard deviation for the portfolio is (a) 11.2. (b) 12. (c) 14.9. (d) 12.7. (e) 10.