1. You live in a country with a relatively high annual inflation rate of 12.5%. If your investment portfolio returned 18.2% last year, your real rate of return was closest to: A. 5.05% B. 5.25% C. 5.50% D. 5.70%

2. Which of the following asset classes is likely to exhibit the highest level of volatility: A. An equally weighted portfolio of international stocks and government bonds B. A moderately diversified portfolio of U.S. commercial paper C. An equally weighted portfolio of U.S. small and large capitalization stocks D. A portfolio of global equities