1. A law to “keep the money in the community” is proposed that would require banks to make 75% of their loans within their own geographic community. What dangers would such a law pose for the financial health of local banks?  

2. XYZ stock price and dividend history are as follows:

Year     Beginning-of-year Price       Dividend paid at Year-End

2010           $100                                $4

2011           $110                                $4

2012           $90                                  $4

2013           $95                                  $4

Compute the standard deviation of stock return.