5. For the Innis Investments example in Chapter 14, suppose that the investment returns are uncertain. Assume
Question:
5. For the Innis Investments example in Chapter 14, suppose that the investment returns are uncertain. Assume that each can be modeled as a lognormal distribution with a mean equal to the expected return in the example and a standard deviation equal to 10% of the mean.
a. For the optimal solution shown in Figure 14.9, what is the probability that the target return of 5% will be achieved?
b. What return will be achieved with a probability of 0.75 or more?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Business Analytics Methods Models And Decisions
ISBN: 9780132950619
1st Edition
Authors: James R. Evans
Question Posted: