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What is the dear of the aggregate portfolio

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1. Jeff Resnick, vice president of operations at Choice Bank, is estimating the aggregate DEAR of the banks portfolio of assets consisting of loans, foreign currencies, and common stock. The individual DEAR's are $300,$700;and $126,700 respectively. If the correlation coefficients between loans and foreign currencies, and loans and common stock, and foreign currencies and common stock are 0.3,0.7, and 0.0 respectively what is the DEAR of the aggregate portfolio?

2. The current one-year Treasury bill rate is 5.2 percent, and the expected one-year rate 12 months from now is 5.8 percent. According to the unbiased expectations theory, what should be the current rate for a two-year Treasury security?

Reference no: EM131365280

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