Question 23 options:

Use the following information to answer the two questions below.

State of Prob. of the Rate of return if state occurs

the economy state of economy Stock A Stock B

Boom 0.75 15% 4%

Bust 0.25 5% 4%

You MUST use 4 digits in every calculation you do in order for your answer to be the same as the one in the system. Enter answer using 4 decimals. Do not use or enter the %. For example, if your answer is 3.48% enter 0.035; if your answer is 0.12013 then enter 0.1201

What is the expected return of a portfolio with 20% in asset A and 80% in Asset B?

_________ What is the standard deviation of the portfolio with 20% in asset

A and 80% in Asset B? ________

Question 24

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It is now January 1. You plan to make a total of 14 deposits of $10,000 each, one every 3 months with the first payment being made today. The bank pays a nominal interest rate of 9% but uses quarterly compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 13 years from today?

Do not use the $ sign. Use commas to separate thousands. Use to decimals. Round to the nearest dollar. For example if you obtain $1,432.728 then enter 1,433; if you obtain $432.00 then enter 432

Your Answer:

Question 24 options:

It is now January 1. You plan to make a total of 14 deposits of $10,000 each, one every 3 months with the first payment being made today. The bank pays a nominal interest rate of 9% but uses quarterly compounding. How much your account with the bank be if you leave the money in the bank to be withdrawn all in 13 years from today?

Do not use the $ sign. Use commas to separate thousands. Use to decimals. Round to the nearest dollar. For example if you obtain $1,432.728 then enter 1,433; if you obtain $432.00 then enter 432

Your Answer:

_________