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An investor wants to invest $300,000 in a portfolio of three mutual funds. The annual fund returns are normally distributed with a mean of 4% and standard deviation of 0.5% for the short-term investment fund, a mean of 7% and standard deviation of 4% for the intermediate-term fund, and a mean of 8.3% and standard deviation of 3% for the long-term fund. An initial plan for the investment allocation is 45% in the short-term fund, 35% in the intermediate-term fund, and 20% in the long-term fund. a. Use Analysis ToolPak, with a seed of 1, to develop a Monte Carlo simulation with 1000 trials to estimate the mean ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year b. If the allocation is changed to 30% short-term, 55% intermediate-term, and 15% long-term, estimate the ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year

An investor wants to invest $300,000 in a portfolio of three mutual funds. The annual fund returns are normally distributed with a mean of 4% and standard deviation of 0.5% for the short-term investment fund, a mean of 7% and standard deviation of 4% for the intermediate-term fund, and a mean of 8.3% and standard deviation of 3% for the long-term fund. An initial plan for the investment allocation is 45% in the short-term fund, 35% in the intermediate-term fund, and 20% in the long-term fund. a. Use Analysis ToolPak, with a seed of 1, to develop a Monte Carlo simulation with 1000 trials to estimate the mean ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year b. If the allocation is changed to 30% short-term, 55% intermediate-term, and 15% long-term, estimate the ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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An investor wants to invest $300,000 in a portfolio of three mutual funds. The annual fund returns are normally distributed with a mean of 4% and standard deviation of 0.5% for the short-term investment fund, a mean of 7% and standard deviation of 4% for the intermediate-term fund, and a mean of 8.3% and standard deviation of 3% for the long-term fund. An initial plan for the investment allocation is 45% in the short-term fund, 35% in the intermediate-term fund, and 20% in the long-term fund. a. Use Analysis ToolPak, with a seed of 1, to develop a Monte Carlo simulation with 1000 trials to estimate the mean ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year b. If the allocation is changed to 30% short-term, 55% intermediate-term, and 15% long-term, estimate the ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year
Transcribed Image Text:An investor wants to invest $300,000 in a portfolio of three mutual funds. The annual fund returns are normally distributed with a mean of 4% and standard deviation of 0.5% for the short-term investment fund, a mean of 7% and standard deviation of 4% for the intermediate-term fund, and a mean of 8.3% and standard deviation of 3% for the long-term fund. An initial plan for the investment allocation is 45% in the short-term fund, 35% in the intermediate-term fund, and 20% in the long-term fund. a. Use Analysis ToolPak, with a seed of 1, to develop a Monte Carlo simulation with 1000 trials to estimate the mean ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year b. If the allocation is changed to 30% short-term, 55% intermediate-term, and 15% long-term, estimate the ending balance after the first year. Note: Round the final answer to two decimal places. Mean ending balance after the first year
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