Part 2 Mrs Jones has a portfolio of shares in Netflix Inc, and in Coca Cola Inc. Her initial investment in Netflix Inc was $200,000 and in Coca Cola Inc $800,000. Let Rn denote the monthly simple return of Netflix stock and assume that Rn ~ N(0.09, (0.18)2). Let Rc denote the monthly simple return of Coca Cola stock and assume that Rc N(0.08, (0.16)2). Let W, denote the portfolio's value at the beginning of the month and W1 denote the portfolio's value at the end of the month. In this example, Wo = $1,000,000. Consider the following questions: a) fe) What is the probability distribution of the end of month value of Mrs Jones's portfolio, W ? [8 marks] b) (d) What is the probability that the end of month value of Mrs Jones's portfolio is less than 700,000? [3 marks] c) fe) What is the loss in dollars that would occur if the returns on both Netflix and Coca Cola stocks are equal to their 5th percentiles? That is, what is the monthly 5% Value at Risk (VaR) on Mr Jones's portfolio? [4 marks] Part 2 Mrs Jones has a portfolio of shares in Netflix Inc, and in Coca Cola Inc. Her initial investment in Netflix Inc was $200,000 and in Coca Cola Inc $800,000. Let Rn denote the monthly simple return of Netflix stock and assume that Rn ~ N(0.09, (0.18)2). Let Rc denote the monthly simple return of Coca Cola stock and assume that Rc N(0.08, (0.16)2). Let W, denote the portfolio's value at the beginning of the month and W1 denote the portfolio's value at the end of the month. In this example, Wo = $1,000,000. Consider the following questions: a) fe) What is the probability distribution of the end of month value of Mrs Jones's portfolio, W ? [8 marks] b) (d) What is the probability that the end of month value of Mrs Jones's portfolio is less than 700,000? [3 marks] c) fe) What is the loss in dollars that would occur if the returns on both Netflix and Coca Cola stocks are equal to their 5th percentiles? That is, what is the monthly 5% Value at Risk (VaR) on Mr Jones's portfolio? [4 marks]