1. Education Plus financial services is offering education savings plan. The plan calls for you to make eight annual payments of $5,000 each, with the first payment occurring today, your child's 10th birthday. Beginning on your child's 18th birthday, the plan will provide $18,000 per year for four years. What return is this investment offering?

a. 9.96%

b. 18.12%

c. 16.69%

d. 14.38%

e. 12.11%

2. An investor is given the following information about two stocks returns.

The investor in interested in investing 50% of his resources in stock 1 and 50% in stock 2.

What is standard deviation of the portfolio given that the coefficient of correlation between the two stocks is -0.2?

a. (0.11)0.5=0.332

b. (0.18)0.5=0.424

c. (0.01665)0.5=0.129

d. (0.0135)0.5=0.116