problem set 6 - Question 1 1 points Save Melissa has...

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Question 1 1 points Save Melissa has invested 40% of her funds in T-bills and 60% of her funds in stocks. If X is the annual return on T-bills and Y the annual return on stocks, the portfolio rate of return is: R= 0.4X + 0.6Y The returns X and Y are random variables because they vary from year to year: X= annual return on T-bills μ X = 6 σ X = 3 Y= annual return on stocks μ Y = 10 σ Y = 8 correlation between X and Y ρ = -0.2 What is σ R (rounded to four decimal places )? 4.7091 Question 2 1 points Save The insurance company sees that in the entire population of homeowners, the mean loss from fire is μ = $600 and the standard deviation of the loss is σ = $500. What is the standard deviation of the total loss for 8 policies (rounded to four decimal places )? (Note that losses on separate policies are independent.) Question 3 1 points Save The insurance company sees that in the entire population of homeowners, the mean loss from fire is μ
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problem set 6 - Question 1 1 points Save Melissa has...

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