Principles of Finance (FIN101)

Q1. Rami deposits $60,000 today in an account that pays 4.6% p.a. interest, compounding semi-annually. How much can be withdrawn from his account in 10 years. (Show your calculations) (1.5 Mark)
Q2. You invest $2000 at the end of every 6 months at a rate of 7% p.a. compounding semi-annually.
How much money would you have in your account after 8 years? (1.5 Mark)
Q3. A portfolio consists of $100,000 in share A that yield 5% and $150,000 in share B with an expected return of 8%. Share A has a variance of 2% and share B has a variance of 3%. The covariance between returns is 0.00782.
a)What is the expected return for this $250,000 portfolio? (1 Mark)
b)What is the variance of the portfolio? (1 Mark)

 

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