1.) You project that you will need $50,000 in 9 years to put a down payment on a home on a conventional mortgage program. You plan to save for this by putting money away monthly and expect to earn a 7% APY (annual percentage yield) on your money. How much do you need to save monthly?

2.) Which has the greatest reinvestment rate risk?

Select one:

a. A bond with a 2-year maturity and providing for a 12% semiannual coupon

b. A bond with a 8-year maturity and providing for a 12% semiannual coupon

c. A bond with a 2-year maturity and providing for a 8% semiannual coupon

d. A bond with a 8-year maturity and providing for a 8% semiannual coupon

e. All provide for equal reinvestment rate risk.