Answers to text questions

[Adam Gehr]

Here are the answers to the text questions I assigned last class.

Chapter 5:
1) c
2) b
3) d
4) b
5) a
6) c

Chapter 6
1) 100,000x1.05^7=140,710.04

4) mean= 14 std. dev. = 23.24

6) arith. mean = 3.15% geom. mean = 2.33% dollar wtd avg= 0.17%

12) 
a) mean =14 std. dev. = 18.9
b) a= 18.9%, b = 23.1%, c = 28%, risk-free = 30%
c) both = 0.37

13)
a) 80% in risky portfolio
b) a= 21.6% b = 26.4%, c = 32%, risk-free = 20%
c) 21.6%

14)
a) y = 0.74074
b) expected return = 14.41%