A S(He) invests in total $3000 and at the end of the year has total interest accumulation of $256. The a catch is the person invests in two separate investments the first yielding 10% and the second yielding 8%. What are the weights that are invested in these two investments.
i used the fv=pv(1+r) formula and got r=0.085 then i used the weighted probability formula and subbed 0.085=0.1w1+.08w2 i just guestimated for this part im not sure if its correct or not but since its 0.085 I assumed that 75% of the weight must be for the 8% yield and the 25% weight must be for the 10% i plugged in the numbers and got the 0.085 but im pretty sure there must be a correct way to do this and im not sure if im right…
Is this a CFAI question? I would plug and chug the answer choices to find the answer (could probably do really quick).
philip.platt Wrote: ------------------------------------------------------- > Is this a CFAI question? I would plug and chug the > answer choices to find the answer (could probably > do really quick). that way would be much quicker and more accurate then my method i used
To do it the long way, you have to make two equations and solve for the variables. I haven’t ever seen CFAI use this much algebra though. w1 + w2 = 1 .08(w1) + .10(w2) = 256 ----- solve for w2: -w1 = w2 - 1 plus w1 = 12.5(256) - 1.25(w2) w1 cancels out and w2 = 799.75 3200 - 799.75 = w1 w1 = 2200.25 edit: my rounding must have been slightly off . . . looks like w1(10%) is 800 and w2 (8%) is 2200
plug in the numbers. only 3 possibilities. pretty quick.
yea plugging in numbers would be quick…but the formula works well as well. (3000x)1.10 + (3000(1-x)) 1.08 = 3256 x= 0.2667 therefore the 2 weights are 26.67% and 73.33%
Thanks for the replies this was a GMAT question
Chung how did you do on L1? where you going from here
band 10, im either going to BU or Northeastern for masters in econ. Northeastern student im curious as to the recruiting for coops these past cycles, how have they been? are BB’s still recruiting…I heard wellington mngmt cut back BIG time
Phillip Platt thanks for the response thats correct…your a legend
Its more competitive this cycle, yet I managed to land a very good/interesting job. Most of the NY co-ops were eliminated, GS takes less than half as before. Wellington/JH/MFS all cut down. Merrill is down, they actually had a placement at Lehman…haha. Well if you come back to NU, keep in touch. I passed but cant register for L2 yet!
I heard UBS cut the IB and S+T internships completely. I’ll be passing this coming June so ill be catching up to you. The Lehman placement has to be for neuberger bremen. Good luck with your internship.
UBS had one set for there ARS fiasco a while back but that was also cut. Thanks man. Good luck.