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Question 5 Each year, the value of (1+ 1) where I is the rate of interest earned in the year, is log- normally distributed. The annual rate of interest I, is independent and identically distributed with mean j = 8% and standard deviation s = 2%. ) Find the parameters, u and o , for the log-normal distribution of (1 + 1). (i) Hence, calculate the probability that the accumulated amount in 15 years' time of a unit investment made at time t = 0 will be less than 95% of the expected value.

Question 5 Each year, the value of (1+ 1) where I is the rate of interest earned in the year, is log- normally distributed. The annual rate of interest I, is independent and identically distributed with mean j = 8% and standard deviation s = 2%. ) Find the parameters, u and o , for the log-normal distribution of (1 + 1). (i) Hence, calculate the probability that the accumulated amount in 15 years' time of a unit investment made at time t = 0 will be less than 95% of the expected value.

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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Question 5 Each year, the value of (1+ 1,) where I; is the rate of interest earned in the year, is log- normally distributed. The annual rate of interest I, is independent and identically distributed with mean j = 8% and standard deviation s = 2%. ) Find the parameters, u and o , for the log-normal distribution of (1 + 1.). (i) Hence, calculate the probability that the accumulated amount in 15 years' time of a unit investment made at time t = 0 will be less than 95% of the expected value.
Transcribed Image Text:Question 5 Each year, the value of (1+ 1,) where I; is the rate of interest earned in the year, is log- normally distributed. The annual rate of interest I, is independent and identically distributed with mean j = 8% and standard deviation s = 2%. ) Find the parameters, u and o , for the log-normal distribution of (1 + 1.). (i) Hence, calculate the probability that the accumulated amount in 15 years' time of a unit investment made at time t = 0 will be less than 95% of the expected value.
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