A stock market advisory service offers three investments portfolios for one of its customers. All portfolios have the same investment cost. Portfolio U contains speculative stocks, which aim for capital gain through price appreciation. Portfolio V is made up of stocks of stable companies that pay good dividends overt the long run. Portfolio W comprises stocks with a moderate potential for growth and a moderate yield of dividends. The customer has enough money to invest in only one of these three portfolios for a period of one year. The net return on investments will depend on whether the economy during the period will be in a stage of inflation, recession, or depression. The net potential gains or losses (in thousands) are calculated as follows: 3. ND: Referring to the Z-Table, calculate theprobability that each alternative will turn outat least a $45K profit? From the NormalDistribution point of view, which alternative isbest?Be sure to show work, indicate the recommendedalternative each time, provide a summary table(see below), and support your finalstatement with a reason.DMUR: ResultsABXbarBeToSure SupportSigma COV NormalDist. %Your AnswerS(GiveReasonsl) ALTERNATIVES2.FiPortfolio UPortfolio VPortfolioWRecession$25$ 47$50.3Inflation$75$ 70$ 805TES OF NATURESTADepression$0$-5$ 15.2DMUR:Considerthat thenowprobabilities for each demand have beencalculated as 3, 5, and .2, respectively. Findthe expected value (Xbar), the standarddeviation (Sigma), and the Coefficient ofVariation (CoV) for each alternative. Whichportfolio would you recommend on the basisof the three?

Find the Given details below: Given details: Alternatives States of Nature Recession…

Answered: 3. ND: Referring to the Z-Table,…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A stock market advisory service offers three investments portfolios for one of its customers. All portfolios have the same investment cost. Portfolio U contains speculative stocks, which aim for capital gain through price appreciation. Portfolio V is made up of stocks of stable companies that pay good dividends overt the long run. Portfolio W comprises stocks with a moderate potential for growth and a moderate yield of dividends. The customer has enough money to invest in only one of these three portfolios for a period of one year. The net return on investments will depend on whether the economy during the period will be in a stage of inflation, recession, or depression. The net potential gains or losses (in thousands) are calculated as follows: