Assorted problems in finance

Reference no: EM1329514

1. Jane Alexander currently has $,7,750 in a money market account paying 7.25% annually. She plans to use this amount and her savings over the next 5 years to make a down payment on a house. She estimates that she will need $20,000 in 5 years. How much should she invest in the money market account semi-annually over the next 5 years to achieve this target?

2. You are the manager of an annuity settlement company. Jim Patton just won the state lottery which promises to pay him $1,000 per year for 20 years, starting from today, and $2,000 per year for years 21-45, given a 9% discount rate. Your company wants to purchase the proceeds from the lottery from Jim. What is the most that your company can offer?

3. Aquaman stock has exhibited a standard deviation in returns of 0.7, whereas Green Lantern stock has exhibited a standard deviation of 0.8. The correlation coefficient between the stock returns is 0.1. What is the standard deviation of a portfolio composed of 70% Aquaman and 30% Green Lantern?

4. The stocks of Microsoft and Apple have a correlation coefficient of 0.6. The variance of Microsoft stock is 0.4 and the variance of Apple stock is 0.3. What is the covariance between the two stocks?

Reference no: EM1329514

Questions Cloud

The hypothesis predicting : The hypothesis predicting that differences exist between the groups being compared is to the hypothesis predicting that no differences exist between the groups

Provide a java class named "input" : Provide a Java class named "Input" containing the method "readInt" (prototype given below) that displays the prompt string, reads an integer, and tests either it is between the supplied minimum and maximum. If not, it prints an error message and r..

Estimate the relationship among inflation-unemployment : Estimate the relationship among inflation,unemployment and business cycle on the industry.

Directional hypothesis is to non-directional hypothesis : Directional hypothesis is to non-directional hypothesis

Assorted problems in finance : The stocks of Microsoft and Apple have a correlation coefficient of 0.6. The variance of Microsoft stock is 0.4 and the variance of Apple stock is 0.3. What is the covariance between the two stocks?

Characteristics are important for fit leaders : What practices and characteristics are important for fit leaders? Which key practices are you committing to pursue in your life?

Explain creating e business : Explain Creating e business and they were unable to make payroll and knew some major changes had to be made

"necessary and proper clause" in u.s. constitution : Where in the U.S Constitution is the Necessary and Proper Clause found?

A researcher was interested in the emotional : A researcher was interested in the emotional effects of music on exam performance. Before their exam, a professor took one group of students into a room in which calming music was played.

User Account

All Pages