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7. You are working in the treasury department of a bank. Turkish Treasury announced that it would issue discounted bond. Nominal value is 100 TL,

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7. You are working in the treasury department of a bank. Turkish Treasury announced that it would issue discounted bond. Nominal value is 100 TL, maturity is 395 days. If the required rate of return is 10 %, how much money do you offer for this bond? (What is the price of the bond?) 8. Consider the data shown in the table below. The risk free interest rate is 3% and the correlation between two risky stocks is -0.4. Suppose, an investor wants to construct a portfolio composed of 70% of Stock A and 30% of Stock B. Calculate the expected return and risk of this portfolio. Stock Standard Deviation Expected Return 15% 0.4 B 7% 0.3

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