Question

16. If an investor planned to put aside $30 per month for the next 20 years, and the investor combined that with $1,000 already saved, how much should the investment be worth after 20 years? Assume 9 percent annual growth with monthly compounding, and select the value closest to the correct answer.

    A. $7,139 C. $24,022 B. $22,597 D. $26,046

17. Which of the following portfolios with zero risk lies closest to the efficient frontier?

A. Return = 7.8 percent, standard deviation = 3.0 B. Return = 0 percent, standard deviation = 0
C. Return = 8 percent, standard deviation = 3.0 D. Return = 5 percent, standard deviation = 0

18. What is the return on the following portfolio?

    Asset 1, representing 50 percent of the portfolio value Asset 2, representing 30 percent of the portfolio value Asset 3, representing 20 percent of the portfolio value

    A. 8.40 percent B. 8.60 percent

19. Which of the following statements is correct?

6% 10% 12%

C. 9.20 percent D. 9.33 percent

1. Whencalculatingtheriskofaportfolio,youshouldadjusttheprocessbythecovariance, or interrelationship, of security price dispersion.

2. When calculating the risk of a portfolio, you should add the weighted average of the standard deviation of each member of the portfolio.

3. When calculating the risk of a portfolio, you should find the weighted average return of the members of the portfolio and divide by the mean standard deviation of the members.

4. Whencalculatingtheriskofaportfolio,youshouldadjusttheprocessbythecorrelation coefficient of security price dispersion.

20. Which of the following assets would work well in an emergency reserve fund?

A. High-yielding corporate bonds C. Income stocks
B. Certificates of deposit with long maturities D. Money market funds

Answer 1

1)

Hence the correct option is D. $26,046