1. An investment will cost you $5000 initially and will pay you $5000 and $10.000 in year 1 and year 2. Assume that you can reinvest the cash flows received at an 8% annual rate of return. What is the modified IRR of the investment?

a

83.3%

b.

100%

c. 75.5% d. 92.2%

1. Suppose the expected return and standard deviation of stock A is 10% and 20% respectively. The expected return and standard deviation of stock B is 15% and 28% respectively. The correlation between A and B is 0.4. A portfolio P consulting of only these two stocks has an expected return of 14%. What is the standard deviation of P? . 21.9% b. 4.85% 4.8%
2. d. 28.6%
3. Suppose the risk free in the market is 3%, the expected return of the market portfolio is 20%, and the standard deviation of the market portfolio return is 2%. The covariance of the return stock A and the market portfolio is 0.08. Based on CAPM, what is the expected return of stock A? . 25% b. 37.5%

C.

25.62%

d. 24.76%

can anyone help solve this with detailed working and the formulas used.