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Author Question: Weston Inc. just agreed to pay 8,000 today, 10,000 in one year, and 15,000 in two years to a ... (Read 56 times)

Marty

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on: Jul 10, 2018
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


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Pamela.irrgang@yahoo.com

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Reply #1 on: Jul 10, 2018
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

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Reply 2 on: Jul 10, 2018
YES! Correct, THANKS for helping me on my review

raenoj

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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