ps) Let X, be the price (in dollars) of stock i one year from now. X1 is N(20, 100) and X2 is N(15, 25). Today I buy four shares of stock 1 for $15/share and three shares of stock 2 for $11/share. Assume X, and X, are independent normally distributed random variables. • Find the mean and variance of the value of my stocks one year from now. • What is the probability that one year from now I will have earned at least a 25% return on my investment? If X1 and X2 were not independent, why would it be difficult to answer previous parts?

ps) Let X, be the price (in dollars) of stock i one year from now. X1 is N(20, 100) and X2 is N(15, 25). Today I buy four shares of stock 1 for $15/share and three shares of stock 2 for $11/share. Assume X, and X, are independent normally distributed random variables. • Find the mean and variance of the value of my stocks one year from now. • What is the probability that one year from now I will have earned at least a 25% return on my investment? If X1 and X2 were not independent, why would it be difficult to answer previous parts?

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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