For the following four questions refer to the information below:

	E(R)
Asset A	9%	3%
Asset B	14%	7%

16. Calculate the expected return of the two-asset portfolio to an investor with 40% invested in Asset A and 60% invested in Asset B

1. 7%
2. 11%
3. 14%
4. 18%

17. Calculate the portfolios risk. The covariance between the two assets is 5.

1. 21%
2. 11%
3. 5%
4. 2%

18. Calculate the portfolios correlation

1. 0
2. - 0.24
3. 0.6
4. 0.28

19. If instead the investor invested 75% of his wealth in Asset B, the portfolio expected return would:

1. Increase
2. Decrease
3. Not change
4. Increase or decrease

20. FDM ltd issues a three-year bond with a 12% coupon rate and interest repayable annually. The bond is priced at its face value of 100 and the market rate of interest is 8%. What is its current value?

1. 97
2. 110
3. 70
4. 800