1. Overall asset allocation for a portfolio is performed using the expected returns, ________________, and correlations between asset classes.

A) Weighted average returns

B) Standard deviation

C) Beta

D) Covariance

2. What is the discount yield, bond equivalent yield, and effective annual return on a $5 million commercial paper issue that currently sells at 98.625 percent of its face value and is 136 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places.(e.g., 32.161))

Discount yield %

Bond equivalent yield %

Effective annual return %