You are deciding between two portfolios; Portfolio A which is made up of stocks and treasury bills, and Portfolio B whichcomprises of risky bonds and treasury bills. The table below contains information on both portfolios that you collected.InformationPortfolio APortfolio BMean returns0,130,16Standard Deviation0,110,09Expected Returns0,150,12Threshold level0,070,07a) What is the probability thàt the returns of Portfolio A lie between 15 and 25 percent?b) If the probability that the returns of Portfolio B would be greater than X is 0.2676, what is the value of X?c) Which portfolio is the optimal portfolio considering your threshold level?d) For the optimal portfolio found in (c), what is the probability that the portfolio will earn a return below the threshold level?

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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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Give an explanation why this statement is either true or false: Portfolio contains n assets. Therefore, portfolio variance for this portfolio is the function of 2n covariances and n variances.
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Need help with parts (a) to (d) on this Intro to Probability and Statistics homework problem. Make sure the answers you provide are lengthy. Don't give short answers. Also, make sure your handwriting is neat and readable. Statistically speaking, the typical romantic couple spends 3 hours of qualitytime together each day, with a variance of 1.5 hours. During my teenageyears, I was under the assumption that a friend and I were a couple, but sherecently pushed back on that claim. So, I logged our time spent together over aperiod of 92 days. As it turned out, we spent 2.65 hours together on a typicalday, again with a variance of 1.5 hours. Assuming that all of the time we spendtogether is “quality” and that relationship time spent is governed by the normaldistribution, do I have sufficient statistical evidence to claim that we were, infact, in a romantic relationship? (a) Find and interpret the z-score of our time spent together, specificallyreferencing what information the sign…
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Suppose the demand for a company’s product in week 1,2, & 3 are each normally distributed. The means are 50, 45, and 65. The standard deviations are 10,5, and 15. Assume these 3 demands are probabilistically independent. Suppose the company has 180 units in stock, and it will not be receiving any more shipments from its supplier for at least 3 weeks. What is the probability that stock will run out during the 3 week period? How many units should the company have in stock, so that it can be 98% certain of not running out during the 3 week period , assuming it will not receive any more shipments during this period?
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