Consider an investment of $WO = $10, 000 in Microsoft for one month, and the monthly 2 %3D return is R - N(0.05, 0.1 ). (a) What is the probability distribution of the end of month wealth W1 = WO(1 + R)? (b) Evaluate Pr(W1 < 9, 000). (c) Find the 95% Value-at-Risk (VaR) on the $10,000 investment in one month. That is to find VaR such that Pr(WO – W1 < VaR) = 0.95. (Ans: N(10500, 10002 ); 0.0668; 1145) If you can do it step by step that will be really helpful -

Consider an investment of $WO = $10, 000 in Microsoft for one month, and the monthly 2 %3D return is R - N(0.05, 0.1 ). (a) What is the probability distribution of the end of month wealth W1 = WO(1 + R)? (b) Evaluate Pr(W1 < 9, 000). (c) Find the 95% Value-at-Risk (VaR) on the $10,000 investment in one month. That is to find VaR such that Pr(WO – W1 < VaR) = 0.95. (Ans: N(10500, 10002 ); 0.0668; 1145) If you can do it step by step that will be really helpful -

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Description: Consider an investment of $WO = $10, 000 inMicrosoft for one month, and the monthlyreturn is R - N(0.05, 0.1 2 ).(a) What is the probability distribution of theend of month wealth W1 = WO(1 + R)?(b) Evaluate Pr(W1 < 9, 000).(c) Find the 95% Value-at

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018

18th Edition

ISBN:9780079039897

Author:Carter

Publisher:Carter

Chapter10: Statistics

Section10.1: Measures Of Center

Problem 9PPS

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Concept explainers

Contingency Table

A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.

Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.

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Question

Consider an investment of $WO = $10, 000 in
Microsoft for one month, and the monthly
return is R - N(0.05, 0.1 2 ).
(a) What is the probability distribution of the
end of month wealth W1 = WO(1 + R)?
(b) Evaluate Pr(W1 < 9, 000).
(c) Find the 95% Value-at-Risk (VaR) on the
$10,000 investment in one month. That is to
find VaR such that
%3D
Pr(WO - W1 < VaR) = 0.95.
(Ans: N(10500, 10002 ); 0.0668; 1145)
If you can do it step by step that will be really
helpful

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