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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Topic "Simple & Compound Interest". Write the solution and box the final answer.
1) When an amount of $1,000 is put in a bank that pays ordinary simple interest at a rate of 5% per year, how many days will it take for it to grow to $1,020? (Use a year with 365 days.) b) If you invest $ 25,000 in a five-year fund. How much interest will there be in the fund at the end of the period if the fund pays interest at a rate of 9% per year compounded quarterly? c) You got $5,000 to invest at a rate of 6% per year compounded continuously. How long do you think it will take for your investment to reach $9,000?
Actuarial science. On Sept 1, 2010, a fund had $180,000. On Feb 1, 2011, the fund balance was $175,000 and a withdrawal of $15,000 was made. On July 1, 2011, the fund balance was $160,000 and a new deposit of $5,000 was made. On Aug 31, 2011, the fund balance was $180,000. The time weighted rate of return is T and the dollar weighted return is D. Find D
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On the basis of how long he has until retirement and his comfort with investment risk, Connor has decided that he wants to allocate the money in his retirement account as follows: 70% to equities, 15% to fixed income, and 15% to cash. If Connor assumes that each asset class provides the low end of the rates of return shown in the table below, what overall rate of return would he expect to earn over the long term? Asset Class Degree of Risk Historical Average Rate of Return Equities High 8% - 12% Fixed Income Moderate 4% - 7% Cash Minimal 2% - 5% Group of answer choices 4.34% 6.50% 1.43% 7.25%
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Question I: Suppose that the exchange rate is $0.92/€. Let rs = 4%, and re = 3%, u = 1.2, d = 0.9, T = 0.75, number of binomial periods = 3, and K = $0.85. Use Binomial Option pricing to answer the following two questions. Use the same inputs as in the previous (first) question, except that K = $1.00. (a) What is the price of a 9-month European call? (b) What is the price of a 9-month American call?
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