Financial Math Answers

Suppose an investment professional is putting together a portfolio of two risky assets A, B and a risk-free asset. Assume that the tangency portfolio combining the two risky assets consists of 80% A and 20% B, and has expected return 8% and volatility of 5.5%. Suppose also that the risk-free rate of return for lending or borrowing is 2%.


(a) Find the equation of the efficient portfolio frontier.
(b) Findtheoptimalportfoliothatwouldgiveanexpectedreturnof10%andexplainhowyouwouldinvest a capital of $2,100,000 with lending or borrowing in this case.

Mladdin is on a salary of $67440 pa paid m monthly how much does he receive each month

How much interest would $2,000 earn in one year at the rate of 4.2%

An investment adviser invested $14,000 in two accounts. One investment earned 8% annual simple interest, and the other investment earned 6.5% annual simple interest. The amount of interest earned for 1 year was $1,021. How much was invested in each account?

amount at 8% = $ ?
amount at 6.5% = $ ?

The Worthingtons love to travel, so when they retired they sold their house and purchased a motor home valued at $165,000. They tow their car, valued at $32,000 behind their motor home when they travel. The Worthingtons have medical bills totaling $1,300 and a balance of $3,000 on credit cards. Since they invested for retirement, the Worthingtons have $200,000 in investments and an additional $20,000 in their savings account. What is the Worthingtons’ net worth?

Petro invests R24000.00 in an investment fund that offers an interest rate of 10% per annum compounded yearly. After 4 years, he withdraws R18000.00 to pay for security system. After a further 2 years he decides to withdraw the remaining amount. How much will this be?
(Hint: Use a time-line).

Tom buys a DVD player on 12 monthly payments. The cash price is $600. He pays 10% deposit and the store charges 9% interest
1.) what is the monthly payments?

Suppose that 10 years ago you bought a home for $120,000, paying 10% as a down payment, and financing the rest at 9% interest for 30 years.

How much interest have you paid so far (over the last 10 years)?

You invest R 20 000.00 at an interest rate of 10% per annum. After how many years will your
investment grow to a value of R 28 000.00 if the interest earned is:

Simple interest
Compound interest

1. Find the amount. That will be accumulated in each account under the condition set forth.
A principal of $2000 is accumulated with 7.5% interest compounded monthly for
4 years.