Question: Use the following 3 statements to answer this question.

1. The more stable the possible returns, the greater the risk

2. Generally, security returns display positive correlations with one another but they are less than one because all securities tend not to follow the movement of the overall market.

3. Any value of correlation less than +! provide a possibility of diverisification

A) 2 and 3 are correct

B) 1 and 3 are correct

C) 1 and 2 are correct

D) all are correct

E) 3 is correct

Question: You signed an initial 300,000$, 30 years mortgage with BMO. The quoted rate was 6.075% (semi0annual compounding), monthly payments, fixed for 5 years. After exactly 5 years, you plan to re-new your mortgage You are offered a new quoted rate of 3.5% (fixed semi0annual compounding). what is your new monthly payment if your re-financial the full outstanding amount for 25 years?

Your new monthly payment will be ________