Consider a portfolio composed of the risk-free asset and


1. What is the effective interest rate if 25.3% is compounded continuously for 7 months?

2. Consider a portfolio composed of the risk-free asset and the All ordinaries. Beta of my stock is 1.19.

What would be the weight on the All ordinaries if you would like your portfolio to have the same beta as your stock? Show all your detailed calculation.

3. A monthly income of 6250 is deposited into an account which has an interest rate of 6% compounded monthly. Calculate the balance in the account after 10 years.

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Financial Management: Consider a portfolio composed of the risk-free asset and
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