Weston Inc. just agreed to pay 8,000 today, 10,000 in one year, ...

[Marty]

Weston Inc. just agreed to pay 8,000 today, 10,000 in one year, and 15,000 in two years to a landowner to explore for, but not extract, valuable minerals.
 
  If the landowner invests the money at a rate of 5.5 compounded annually, what is the investment worth two years from today?
  What will be an ideal response?

Question 2

You have decided to create a portfolio with two assets: stock X and stock Y. You invest 20 of your funds in X and 80 of your funds in stock Y. The standard deviation of X is 30 and the standard deviation of Y is 40.
 
  The two stocks have a correlation coefficient of - 0.5. What is the portfolio's standard deviation?
  A) 30.00
  B) 29.46
  C) 33.24
  D) 36.92
  E) 40.00

[Pamela.irrgang@yahoo.com]

Answer to Question 1

Answer: FV = (PV  (1 + r)n) = 8,000  (1.055)2 + 10,000  (1.055)1 + 15,000  (1.055)0 = 34,454.20.

Answer to Question 2

B

[Marty]

Excellent

[amandanbreshears]

Gracias!