An investor wants to invest $300,000 in a portfolio of three mutual funds. The annual fund returns are normally distributed with a meanof 0.02% and standard deviation of 0.30% for the short-term investment fund, a mean of 0.05% and standard deviation of 0.03% for theintermediate-term fund, and a mean of 0.062% and standard deviation of 0.07% for the long-term fund. An initial plan for theinvestment 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 100 trials to estimate the mean ending balanceafter the first year.Note: Round the final answer to two decimal places.Mean ending balance after the first yearb. If the allocation is changed to 30% short-term, 55% intermediate-term, and 15% long-term, estimate the ending balance after the firstyear.Note: Round the final answer to two decimal places.Mean ending balance after the first yearc. Compare the two investment strategies in parts a and b and choose the most appropriate answer from the following choices.O On average, the investment strategy in part a is more risky and yields a lower return.O On average, the investment strategy in part a is less risky and yields a higher return.O On average, the investment strategy in part a is less risky but yields a lower return.O On average, the investment strategy in part a is more risky but yields a higher return.

Answered: Image /qna-images/answer/2d59dced-023d-41b5-a767-817e3c50c665.jpg

Answered: Pak, with a seed of 1, to develop a…

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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52. Social Security trust fund Social Security benefits are paid from a trust fund. As mentioned in the Application Preview, the trust fund balance, B, in billions of dollars, t years past the year 2000 is projected to be described by B = -1.056785714? + 8.2592857141 + 74.07142857 (Source: Social Security Administration projections). Find in what year the trust fund balance is projected to be $1000 billion in the red-that is, when B = -1000.
4. Gursoy Furnitures sells office chairs ordered from its flagship store. It costs $100 to place an order, and the lead time is two weeks. Demand during lead time is N(40, 1.96). Gursoy Furnitures estimates that each stockout causes a loss of $50 in future goodwill. It pays $60 for each chair and sells it for $100. The annual holding a chair inventory is 30% of its purchase cost. a) Assuming that all demand is backlogged, what are the reorder point and the safety stock level? b) To meet 99% service objective, what should be the safety stock level for Type 1 Service? For Type 2 Service?
3. Investments Nui invests $10,000, received from her grandmother, in three ways. With one part, she buys mutual funds that offer a return of 6.5% per year. She uses the second part, which amounts to twice the first, to buy government bonds at 6% per year. She puts the rest in the bank at 5% annual interest. The first year her investments bring a return of $605. How much did she invest in each way?
Villalpando Winery wrts to rase $15 million from the sale of prefemed stack. It the winery warts to sel one milion shares of prefened stock, whut ama dvdend will it have to promise it investors demand a retum of a. 11%? b. 15%? d. 76? f. 3%? a Whut aw dividend will it have to promise it vestos demand a retun of 1N?
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b) What would determine whether an active or passive portfolio strategy would be pursued?
32. A hardware company sells a lot of low-cost, highvolume products. For one such product, it is equallylikely that annual unit sales will be low or high. Ifsales are low (30,000), the company can sell theproduct for $20 per unit. If sales are high (70,000),a competitor will enter and the company will be ableto sell the product for only $15 per unit. The variablecost per unit has a 20% chance of being $10, a 60%chance of being $11, and a 20% chance of being $12.Annual fixed costs are $20,000.a. Use simulation to estimate the company’s expectedannual profit.b. Find a 95% interval for the company’s annualprofit, that is, an interval such that about 95% ofthe actual profits are inside it.c. Now suppose that annual unit sales, variable cost,and unit price are equal to their respective expectedvalues—that is, there is no uncertainty. Determinethe company’s annual profit for this scenario.d. Can you conclude from the results in parts a and cthat the expected profit from a simulation is…

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