1. A portfolio consists of $100,000 in Treasury bills (TB) that yield 5.5%; $150,000 in Woodside Petroleum Limited stock with an expected return of 8.5%; and $150,000 in AMP stock with an expected return of 9.0%. What is the expected return for this $400,000 portfolio?
2. You have saved $45,000 and decide to invest it in government bonds. If you hold your investment until maturity your annual rate of return will be 5.60 percent (p.a.). If the investment matures in 25 years' time, how much will your savings have grown to?