(4 points each) 1 our current salary is $60,000 (S) per year. If you invest 8 percent (b) of each s salary in a retirement plan at a guaranteed return (i) of 10 percent per year, how much would you have at the end of 30 years, if: a) Your salary is unchanged for the next 30 years? b) Your salary grows (g) at 8 percent per year? 2. You invest in a $1 million face value, 120 day t-bill @ a discount yield of 3 percent. a) What is the price of the t-bill? b) What is the holding period yield if you hold the bill to maturity 3. You manage a money market portfolio consisting of the following securities (all in face value amounts) $20 billion in 90-day T-bills, $10 billion in $180-day Commercial Paper. News of hostilities in the Middle East causes a "flight to quality T-bill rates fall by 10 basis points while commercial paper rates rise by 10 basis points. What is the gain or loss on the portfolio? 5x Fund earned the following returns in each of the last 3 years: 10% in 2012, 20% in 2013, and-15% in 2014 . Suppose you invested $10,000 at the beginning of 2012 added $15,000 at the beginning of 2013, and added another $25,000 at the beginning of 2014 4. a) How much would you have in the fund at the end of 2014? b) What was your average return over the 3 years? You buy a $1 million face value 90-day treasury bill at a discount yield of 5 percent and finance it with a 30-day term repo at a repo rate of 4.25 percent a) What is your profit or loss on the transaction if, at the end of 30 days, you expect 5. 60-day t-bills to sell at a discount yield of 4.90 percent? b) What is the breakeven yield on the Repo? II (20 Points) You are the manager for a $100 million portfolio, which may be invested in any combination of bonds and stocks. PLEASE TURN OVER