Suppose you have purchased a portfolio of two financial assets, Asset A and Asset B, for $100 and $120 respectively, with the intention of selling them after one year. Assume that the prices of the two assets (A and B) in one year are statistically independent of each other and are both normally distributed with means E(PA)=105 and E(PB)=110 and variances Var(PA)=300and Var(PB)=400.

(a) What is the expected value of your portfolio in one year (accurate to 3 decimal places)? (b) What is the variance of the value of your portfolio in one year (accurate to 3 decimal places)?

(c) What is the probability that, in one year, your portfolio will be worth less than you paid for it (accurate to 3 decimal places)?

(d) Calculate the value of the constant cc defined by the equation P(V>c)=0.1, where V is the value of your portfolio in one year. Enter the value of cc (accurate to 3 decimal places) in the box below.