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1 Suppose security C pays $800 if the economy is weak and $200 if the economy is strong

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1 Suppose security C pays $800 if the economy is weak and $200 if the economy is strong. Risk free rate is 5% and the market index security (MIS) pays $800 and $1400 is the economy is weak and strong, correspondingly. MIS is priced at $950

1. What is the expected return of security C?
2. What is the risk premium of security C?
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   1. A project has the following net cash flow series : End of Year Cash Low 0 -100 1 -30 2 -20 3 0 4 120 5 220 6 320 Assume i = 15%. Determine the present worth of the project (5 Points) 280 -75 175 200 2. Determine the project balance at the end of year 2 (5 Points)