Suppose that you have $5000 and you are contemplating the purchase of two investments, IBM and Walgreen's.
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Suppose that you have $5000 and you are contemplating the purchase of two investments, IBM and

Walgreen's.

One year from now, IBM can be sold at $ X per dollar invested, and Walgreen's can be

sold for $ Y per dollar invested. You regard X and Y to be statistically independent Normal random

variables with expected value 1.1 and variance 0.04.


(a) If you put all your money in IBM, what is the probability that you will be able to sell it one

year from now at a positive prot?

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