ANOTHER EXAMPLE • Consider the following information on returns and probabilities: State          Probability        X         Z Boom             .25              15%     10% Normal          .60              10%      9% Recession      .15               5%       10% • What are the expected return and standard deviation for a portfolio with an investment of $6,000 in asset X and $4,000 in asset Z?

6. Historically, a given day at the beginning of March in upstate New York has a 18% chance of snow and a 12% chance of rain. If there is a 4% chance it will rain and snow on a day, then which of the following represents the probability that a day in early March would have either rain or snow? (1) 0.30 (3) 0.02 (2) 0.34 (4) 0.26

Please help with example 2

XYZ Insurer has economic capital of $150,00. It has just collected $450,000 in premiums and projects total loss obligations (liabilities) according to the following table. Projected Total Losses $200,000 S300,000 $400,000 $500,000 S600,000 S700,000 SS00,000 $900.000 Probability of Total Losses 10 20 35 20 10 .03 015 005 What is the probability that XYZ Insurer will not have enough assets and capital to meet its loss obligations? 3% 5% 01:49

Q3

consultant has been hired to redesign a company's production facility. The consultant estimates the probabilities of her potential profit as shown in the table below. What is her profit expectation?$   Profit/Loss Probability $40,000 0.05 $30,000 0.30 $20,000 0.38 $10,000 0.20  $5,000 0.07

How would you explain the EXPECTED VALUE in gambling, buying an insurance or in our daily life? Please bring an example.  Thank you!

PLSS ANSWER ASAP!!

Part 2) Five hundreds tickets are sold at $ 2 each for a smartphone valued at $ 1000. What is the expected value of the gain if you purchase one ticket?

You plan to invest $1,000 in a corporate bond fund or in a common stock fund. The information to the right about the annual return (per $1,000) of each of these investments under different economic conditions is available, along with the probability that each of these economic conditions will occur. Complete parts (a) through (d) below. Economic Probability Condition 0.01 Corporate Common Bond Fund Stock Fund <-300 Extreme recession 0.09 0.20 -990 -350 - 50 Recession Stagnation Slow growth Moderate growth High growth -40 30 70 80 0.25 0.30 0.15 50 150 350 90 a. Compute the expected retum for the corporate bond fund and for the common stock fund. The expected return for the corporate bond fund is (Round to two decimal places as needed.) The expected return for the common stock fund is (Round to two decimal places as needed.) b. Compute the standard deviation for the corporate bond fund and for the common stock fund. The standard deviation for the corporate bond fund is. (Round to two…