You own a portfolio that has $700 invested in Stock A and $2,400 invested in Stock B. If the expected returns on these stocks are 11 percent and 18 percent, respectively, what is the expected return on the portfolio?

a.

16.42%

b.

15.9%

c.

12.58%

d.

13%

Knowing that the nominal interest rate for a bank deposit of one year is 30% per year and the expected annual inflation rate is 5%, compute the real interest rate earned on the account at the end of the year.

a.

6%

b.

0.16%

c.

23.81%

d.

0.81%

How much is worth today an annuity of $600 over 12 years at a discount rate of 11%? (Calculations must be made to at least four decimal places).

a.

$4,088.22

b.

$3,895.68

c.

$1,499.1

d.

$13,627.91