The risk premium that risk averse investors will demand on a security will be in proportion to the __________ of the portfolio

A bond that is currently selling at $1,000 offers to pay $50 annually. What is the percentage rate of return on the bond?

A. 10% B. 50% C. 5% D. 20%

Emma, 23, just graduated from college in Child, Youth and Family Studies and has been working in outreach for the past 12 months. She doesn't make a lot of money at her job, but she learned in her financial management class that she should do what she can to save and invest her money for her future financial goals. Currently, in her budget, she has been able to save $50.00 each month and at the end of her first year of working, she has accumulated $600.00. She has decided to invest her $600.00 in a Certificate of Deposit that will pay annual interest rate of 3% if she leaves the money on deposit (in the account) for 4 years. Use the information provided above to fill in the Future Value (FV) formula: FV = PV*(i+1.0)n