IA
FIN2601 MAY/JUNE EXAM
FOR SEMESTER 1 2025
FEND TUTORIALS
,Question 1
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Your grandmother's portfolio is structured with 40% of her funds allocated to Transatlantic
Transaction and the remaining 60% invested in Treasury Bills. This allocation strategy
reflects a balance between potential returns and risk mitigation, aligning with her
investment objectives and risk tolerance. The investment broker overseeing your
grandmother's portfolio has furnished pertinent details to help in strategic decision-making:
Portfolio Probability Possible return
Transatlantic Transaction 0,6 –20%
0,3 15%
0,1 30%
Moderated Mediums 0,6 14%
0,3 12%
0,1 30%
You are required to calculate the expected return of your grandmother's portfolio.
a.
12,50%
b.
–2,96%
c.
, 4,54%
d.
7,20%
Clear my choice
Question 2
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The financial manager of Blackbelt Technologies wishes to determine the standard deviation
from a proposed investment project. The expected returns from the project are related to
the future performance of the economy over the period as follows:
Economic scenario Probability of occurrence Rate of return
Strong growth 0,25 15%
Moderate growth 0,50 12%
Low growth 0,25 8%
What is the standard deviation of the proposed investment project?
a.
2,49%
b.
11,75%
, Question 3
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A company has the opportunity to invest in one of three possible investments. The financial
analysts predict the following possible outcomes for the three investments:
Outcome Probability Investment C: Investment D: Investment E:
Expected return Expected return Expected return
Pessimistic 30% 2% 8% 6%
Most likely 40% 10% 10% 8%
Optimistic 30% 18% 12% 11%
Calculate the range of returns for the three investments.
a.
Range of outcomes: C 16%; D 4%; E 5%
b.
Range of outcomes: C 8%; D 2%; E 3%
c.
Range of outcomes: C 20%; D 20%; E 17%
FIN2601 MAY/JUNE EXAM
FOR SEMESTER 1 2025
FEND TUTORIALS
,Question 1
Not yet answered
Marked out of 2.00
Flag question
Question text
Your grandmother's portfolio is structured with 40% of her funds allocated to Transatlantic
Transaction and the remaining 60% invested in Treasury Bills. This allocation strategy
reflects a balance between potential returns and risk mitigation, aligning with her
investment objectives and risk tolerance. The investment broker overseeing your
grandmother's portfolio has furnished pertinent details to help in strategic decision-making:
Portfolio Probability Possible return
Transatlantic Transaction 0,6 –20%
0,3 15%
0,1 30%
Moderated Mediums 0,6 14%
0,3 12%
0,1 30%
You are required to calculate the expected return of your grandmother's portfolio.
a.
12,50%
b.
–2,96%
c.
, 4,54%
d.
7,20%
Clear my choice
Question 2
Not yet answered
Marked out of 1.00
Flag question
Question text
The financial manager of Blackbelt Technologies wishes to determine the standard deviation
from a proposed investment project. The expected returns from the project are related to
the future performance of the economy over the period as follows:
Economic scenario Probability of occurrence Rate of return
Strong growth 0,25 15%
Moderate growth 0,50 12%
Low growth 0,25 8%
What is the standard deviation of the proposed investment project?
a.
2,49%
b.
11,75%
, Question 3
Not yet answered
Marked out of 1.00
Flag question
Question text
A company has the opportunity to invest in one of three possible investments. The financial
analysts predict the following possible outcomes for the three investments:
Outcome Probability Investment C: Investment D: Investment E:
Expected return Expected return Expected return
Pessimistic 30% 2% 8% 6%
Most likely 40% 10% 10% 8%
Optimistic 30% 18% 12% 11%
Calculate the range of returns for the three investments.
a.
Range of outcomes: C 16%; D 4%; E 5%
b.
Range of outcomes: C 8%; D 2%; E 3%
c.
Range of outcomes: C 20%; D 20%; E 17%
