An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of .21 and a standard deviation ofreturn of .39. Stock B has an expected return of .14 and a standard deviation of return of .20. The correlation between the returns of A and Bis -0.4. The risk-free rate of return is .05. What is the expected return on the optimal risky portfolio (rounded to the nearest .0001)?

A BExpected return on stock A21%Expected return on stock…

Answered: An investor can design a risky…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Data can be approximated quite well by a N(3.4, 3.1) model. Economists become alarmed when productivity decreases. According to the normal model what is the probability that the percent change in worker output per hour from the previous quarter is more than 1.6 standard deviations below the mean? What is the probability that the percent change in worker output from the previous quarter is between -1.56 and 4.33?
Suppose that the recovery time from the infection with a certain virus is normally distributed with a mean of 6.5 days and a standard deviation of 1.5 days. Answer each question. Draw a graph illustrating the recovery time. Make sure to indicate 3 standard deviations from the mean. P(X>7.3)=? P(X <4.7)=? P(5.1<X<7.7)=? John's recovery time is lasting more than 9.2 days. Is it unusual (and should he be concerned yet)? What is the middle 90% recovery time? What is the 80%tile recovery time?
Accrotime is a manufacturer of watches. Accotime researchers have shown that watches hwe an average life of 28 months before certain electronic components deteriorate causing the watch to become unreliable. The standard deviation of watch lifetimes is 5 months and the distribution is noemal. If Accrotime guarantees a full refund of any defective watch for 1.5 years after the purchase, what percentage of total production will the company expect to replace? Write your answer as a percentage rounded to 1 decimal place. For the toolbar, Press ALT+F10 (PC) or ALT+FN+F10 OMCA) 0 WOAOS POWEASD BY TINY
Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 49 and a standard deviation of 16 . The customers with scores in the bottom 5% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.
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Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 51 and a standard deviation of 15 . The customers with scores in the bottom 10% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.
Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 50.5 and a standard deviation of 16. The customers with scores in the bottom 5% are described as "risk averse. What is the questionnaire score that separates customers who are considered risk averse from those who ar not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place. U Continue X S Submit Terms of Use | Privacy Center
Risk taking is an important part of investing. In order to make suitable investment decisions on behalf of their customers, portfolio managers give a questionnaire to new customers to measure their desire to take financial risks. The scores on the questionnaire are approximately normally distributed with a mean of 50 and a standard deviation of 14. The customers with scores in the bottom 15% are described as "risk averse." What is the questionnaire score that separates customers who are considered risk averse from those who are not? Carry your intermediate computations to at least four decimal places. Round your answer to one decimal place.
A Scenario: Jimmy store sells large tins of Tom Tucker Coffee. The deli uses a periodic review system. Inventory is checked every 10 days which more orders are needed for tins. Order lead time is 3 days. Average demand is 7 tins, so average demand during the reorder period and order lead time (13) is 91 tins. Standard deviation of demand during the same 13 day period is 17 tins.1. Calculate the restocking level ( Assume the desired level is 90%)2. Suppose standard deviation of demand during the 13-day period drops to 4 tins. What happened to restocking level? Explain why?3. Draw a saw-tooth diagram. Beginning inventory level is equal to restocking level and the demand rate is a constant 7 tins per day. What is the safety stock level? What is the average inventory level?
Exercise 6. Regression Fallacy. Historically, scores on the two midterms had a correlation of 0.48. Suppose that Jeri scored 2.1 standard deviations below the mean on the first midterm. (a) How many standard deviations [above or below?] the mean would you predict for her second midterm?
solve a b c
A population of values has a mean of 59.6 and standard deviation of 35.4. Find the probability that a sample of 58 values from this population will have a mean between 52.6 and 63.8.Enter your answers as numbers accurate to 4 decimal places.

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