Question

Save & Fall Also has all the money invested in two mutual funds, A and B. She knows that there is a 40% chance that fund A wi
0 0
Add a comment Improve this question Transcribed image text
Answer #1

solution:

given

p(A)=0.40

p(B/A)=0.60

P(B)=0.30

p(A ∩ B)=0.60*0.40=0.24

the probability that atleast one of the funds will rise in price

=p(A U B)=P(A)+P(B)-P(A ∩ B)

=0.40+0.30-0.24

=0.7-0.24

=0.46

Add a comment
Know the answer?
Add Answer to:
Save & Fall Also has all the money invested in two mutual funds, A and B....
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • An investor owns a portfolio consisting of two mutual funds, A and B, with 60% invested in A. The following table lists...

    An investor owns a portfolio consisting of two mutual funds, A and B, with 60% invested in A. The following table lists the inputs for these funds. An investor owns a portfolio consisting of two mutual funds, A and B, with 60% invested in A. The following table lists the inputs for these funds. Fund B Fund A 30 Measures Expected value Variance Covariance 24 49 87 36 a. Calculate the expected value for the portfolio return. (Round your answer...

  • please help with this question 2. A pension fund manager is considering three mutual funds. The...

    please help with this question 2. A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Fund Stock fund (S) Bond fund (B) Expected Return 20% 12% Standard Deviation 30% 15% The correlation between the fund returns is 0.10. a)...

  • A pension fund manager is considering three mutual funds. The first is a stock fund, the...

    A pension fund manager is considering three mutual funds. The first is a stock fund, the second Check my work a batte 1.ba VE points A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a Tobili money market fund that yields a sure rate of 40 The probability distributions of the risky funds are: Eirs) = 10% 6s=327 Expected Return...

  • ANSWER ALL. fiund is considering three mutual funds. The first is a stock fund, the second is money market fund yielding 1%. The probability a bond fund, and the third is a Exsciod Retcn 10% 5% 12...

    ANSWER ALL. fiund is considering three mutual funds. The first is a stock fund, the second is money market fund yielding 1%. The probability a bond fund, and the third is a Exsciod Retcn 10% 5% 12% Stock Fund (S) Bond Fund (B) The correlation between the fund returns is 0.10 (ie. negative). 30. Calculate the wcights on socks (mu) and bonds (m) associated with the Minimum b, (w-74% , w -26%) d. (we-28%, w-72%) the expected return for a...

  • A pension fund manager is considering three mutual funds. The first is a stock fund the second is...

    A pension fund manager is considering three mutual funds. The first is a stock fund the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.5%. The probability distributions of th risky funds are The following data apply to Problems 8-12. Standard Deviation 32% 23 Expected Return 15% Stock fund (S Bond fund (B) The correlation between the fund returns is.15 8. Tabulate and draw...

  • Jennifer is interested in the mutual fund RBC U.S. Index Fund – Series A. She has...

    Jennifer is interested in the mutual fund RBC U.S. Index Fund – Series A. She has a few questions for you before she buys this investment. a) Does the reported fund’s return include the Management Expense Ratio (MER) ? Yes or No b) What type of fee is charged: No-load, Front-end load or a Back-end load? c) Is the status of this mutual fund classified as a closed-end or open-end mutual fund?   d) Based on your response in c), explain...

  • 1. Which of the following is true regarding spending and saving? a. Money that is spent...

    1. Which of the following is true regarding spending and saving? a. Money that is spent cannot be saved. b. Spending is good for the economy; saving is bad for the economy. c. Spending money on items that are on sale is the same as saving money. d. Saving money and spending the same dollars has become easier with online banking. 2. If savers were to decrease the level of savings in an economy, what would happen in the loanable...

  • Shari has $4000 which she wants to put into a Keogh account before April 15. Doing...

    Shari has $4000 which she wants to put into a Keogh account before April 15. Doing so will save Shari over $1600 in federal and state taxes. Shari is not an experienced investor, but she knows that she wants to invest in stocks rather than bonds or mutual funds. She has heard that financial expert, Craig Jaynes, has predicted large increases in the following stocks during the coming year: - Shares of Topeka Electronics should rise to $50. - Crosswind...

  • help pls Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plan...

    help pls Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plans to invest in the common stock of Smart-investment Corporation Knowing that you are studying finance, she asks for your suggestion. You calculation shows that yield on Treasury securities is 6%. You know that the S&P 500 Index's expected annual return is 14% Your coonometric model tells you that beta of this company's stock is 1.25. Aunt Beth tells you that this company...

  • I need help calculating all kf these questions. Really stuck on all of them! Thank you!...

    I need help calculating all kf these questions. Really stuck on all of them! Thank you! Year using the returns for the first three years. The next rolling ace would be calculated using the returns from Years 2. 3. and 4, and so on Using the annual returns for large company stocks and Treasury bills, calculate both the 5- and 10-year rolling average return and standard deviation. h Over how many 5-year periods did Treasury bills outreform Caree company stocks?...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT