You own stock worth $20,000 in a company with standard deviation of returns of 22%. You also own stock worth $80,000 in a company with standard deviation of returns of 36%. These are the only stocks in your portfolio. If the coefficient of correlation between the returns of these companies is .80, what is your portfolios standard deviation of returns?

Select one:

a. 55.53%

b. 19.27%

c. 31.23%

d. 35.05%

LIBOR notes are often sold in large denominations with a 90-day maturity, and their interest rate convention is based on a year with 360 days. What is the change in interest on a million-dollar face value LIBOR note with a 90-day maturity if the interest rate changes by one basis point?

Select one:

a. $250

b. $1,000

c. It is not possible to generalize

d. $100

e. $25