1) Two assets, A and B, have the same expected return (10%) and the same level of risk (average). Which of the following statements is true?

Select one: a. A rational investor will either put 100% of her funds into asset A or 100% of her funds into asset B because the return will be the same but the investor will not have to track two separate investments. b. A rational investor is indifferent between investing 100% in A, 100% in B, or a combination of A and B, because the return and risk will be the same. c. A combination of assets A and B will have the same expected return (10%) as either asset A or asset B, but may have less than average risk depending on how the cash flows from each asset move together. d. A combination of assets A and B will result in the same expected return (10%) as investing 100% in A or 100% in B, but the risk will increase because now two investments are at risk.

2) Calculate the future sum of $5,000, given that it will be held in the bank for 5 years at semiannuallyl interest rate of 6 percent

Select one: a. 6719 b. 7350 c. 7619