1. Janice had an unpaid balance of $1,695.75 on her credit card statement at the beginning of December. She made a payment of $190.00 during the month. If the interest rate on Janice's credit card was 2.5% per month on the unpaid balance, find the finance charge and the new balance on January 1.

Finance charge = $52.53; new balance = $1,558.28

Finance charge = $40.50; new balance = $1,546.25

Finance charge = $42.39; new balance = $1,548.14

Finance charge = $46.50; new balance = $1,552.25

2. Which statement is true of an investor’s required return for a particular investment/asset?

a It is always equal to the market interest rate

b It is positively related to the risk associated with the investment

c It is positively related to the asset’s liquidity

d It is negatively related to the rates of return of similar investments