An investor puts $2,000 into a deposit account with a fixed rate of return of 10% per year. A second sum of $1,000 is invested in a fund with an expected rate of return of 16% and a standard deviation of 8% per year. a. Find the expected value of the total amount of money this investor will have after a year. b. Find the standard deviation of the total amount after a year.
An investor puts $2,000 into a deposit account with a fixed rate of return of 10% per year. A second sum of $1,000 is invested in a fund with an expected rate of return of 16% and a standard deviation of 8% per year. a. Find the expected value of the total amount of money this investor will have after a year. b. Find the standard deviation of the total amount after a year.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An investor puts $2,000 into a deposit account with a fixed
a. Find the expected value of the total amount of money this investor will have after a year.
b. Find the standard deviation of the total amount after a year.
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