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Author Question: Dottie has decided to set up an account that will pay her granddaughter (Lexi) 5,000 a year ... (Read 188 times)

berenicecastro

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on: Jul 10, 2018
Dottie has decided to set up an account that will pay her granddaughter (Lexi) 5,000 a year indefinitely. How much should Dottie deposit in an account paying 8 percent annual interest?
 
  What will be an ideal response?

Question 2

Combining two assets having perfectly positively correlated returns will result in the creation of a portfolio with an overall risk that ________.
 
  A) remains unchanged
  B) decreases to a level below that of either asset
  C) increases to a level above that of either asset
  D) lies between the asset with the higher risk and the asset with the lower risk


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mcarey591

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Reply #1 on: Jul 10, 2018
Answer to Question 1

PV = 5,000/0.08 = 62,500

Answer to Question 2

D


berenicecastro

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Reply 2 on: Jul 10, 2018
Great answer, keep it coming :)

ghepp

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Reply 3 on: Yesterday
Wow, this really help

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