1. Jane Alexander currently has $,7,750 in a money market account paying 7.25% annually. She plans to use this amount and her savings over the next 5 years to make a down payment on a house. She estimates that she will need $20,000 in 5 years. How much should she invest in the money market account semi-annually over the next 5 years to achieve this target?

2. You are the manager of an annuity settlement company. Jim Patton just won the state lottery which promises to pay him $1,000 per year for 20 years, starting from today, and $2,000 per year for years 21-45, given a 9% discount rate. Your company wants to purchase the proceeds from the lottery from Jim. What is the most that your company can offer?

3. Aquaman stock has exhibited a standard deviation in returns of 0.7, whereas Green Lantern stock has exhibited a standard deviation of 0.8. The correlation coefficient between the stock returns is 0.1. What is the standard deviation of a portfolio composed of 70% Aquaman and 30% Green Lantern?

4. The stocks of Microsoft and Apple have a correlation coefficient of 0.6. The variance of Microsoft stock is 0.4 and the variance of Apple stock is 0.3. What is the covariance between the two stocks?