1. What is the link between real assets and financial assets? Can the share market perform strongly while the underlying economy is performing poorly? Is it sustainable in the long term?
2. You have just graduated from university and you would like to travel before entering the work force. You want to go on a holiday to Europe for 6 weeks, and you estimate the cost to be about $15,000. You do not have enough money and so you think of borrowing from your older brother to finance the trip. Your brother agrees to lend you the money provided that you pay an interest of 4% p.a. and you make a monthly repayment to pay off the loan within 2 years. Assumes the first payment happens at the end of the month.

• What is the monthly repayment that you have to make?
• What is the effective interest rate?