Standard deviation of returns for the combined investment

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1. An estate leaves $700,000 to three children ages 11, 17 and 20. Each child is to receive the same amount at age 25. How much does each receive if the fund is invested at 6.5% interest compounded quarterly? (show all work) (No excel) (Use basic intrest principles needed)

2. Stock A has a standard deviation of returns of 48% and Stock B has a standard deviation of returns of 49%. Suppose you decide to invest all of your investment funds in these two stocks, and 65% is invested in Stock A. The correlation coefficient of returns for these two stocks is 0.18. What is the standard deviation of returns for the combined investment in these two stocks?

Reference no: EM131994793

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