18. Sam purchased a 10 year par annual bond with a coupon rate of 4%. One year later, YTM drops by 1%. What's Sam's holding period return? 1) 7.8% 2) 11.8% 3) 3% 4) 5% 19. You invest $100 in a complete portfolio. The complete portfolio is composed of a risky asset with an expected rate of return of 12% and a standard deviation of 10% and a treasury bill with a rate of return of 5%. You want the portfolio's standard deviation to be at most 8%. What's the maximum expected return of the portfolio? 1) 5% 2) 8.5% 3) 10.6% 4) 12% 20. You invested 30% in the stock fund and the rest in the bond fund. The return distribution of the risky funds are shown in the table below. The correlation between the fund returns is 0.2. Expected return Standard deviation Stock fund 15% 30% Bond fund 8% 20% What's the standard deviation of your portfolio? 1) 18% 2) 23% 3) 26% 4) 0% 21. A coupon bond which pays interest of $40 annually, has a par value of $1,000, matures in 5 years, and is selling today at a $159.71 discount from par value. The actual yield to maturity on this bond is (in APR). 1) 5% 2) 6% 3) 7% 4) 8%