Author Question: Consider the data provided in the table below for a portfolio of Assets A and B. The correlation of ... (Read 97 times)

vHAUNG6011 · **on:** Jul 10, 2018

Consider the data provided in the table below for a portfolio of Assets A and B. The correlation of the two assets is = -0.9523. What is the standard deviation of the returns of the portfolio?

Asset A Asset B
Portfolio Weights 0.33 0.67
Standard Deviation 0.5 0.6

A) 6.25
B) 25
C) 35
D) 55
E) 57.5

Question 2

Johnson has an annuity due that pays 600 per year for 15 years. (Note: There are 15 annual cash flows with the first cash flow occurring today.)

What is the value of the cash flows 14 years from today (immediately after the last deposit is made) if they are placed in an account that earns 7.50?
A) 9,000.00
B) 9,675.00
C) 15,671.02
D) 16,846.35

Viet Thy · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

B

Answer to Question 2

Answer: C
Explanation: C) FV = PMT = 600 = 15,671.02.
MODE = END
INPUT 15 7.5 0 -600 ?
KEY N I/Y PV PMT FV
CPT 15,671.02

In this case, the computation is made as if this is an ordinary annuity beginning one year ago with the first payment made today