The portfolio of a pension fund manager consists of sixty B-grade…

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Question Answered step-by-step The portfolio of a pension fund manager consists of sixty B-grade… The portfolio of a pension fund manager consists of sixty B-grade (junk grade) municipal bonds.A B-grade municipal bond has a 15% chance of default in the next one year, and you may assume that all the municipal bonds are independent of each other.Suppose that the fund manager invests equal amounts in each of the sixty bonds. If a municipal bond does not default, the net earnings from the bond are estimated to be $1 million. If the bond defaults, the net earnings will be -$3 million (i.e., a loss of $3 million).Over the next one year, what is the fund manager’s expected net earning in millions? 20 24 31 The portfolio of a pension fund manager consists of sixty B-grade (junk grade) municipal bonds. A B-grade municipal bond has a 15% chance of default in the next one year, and you may assume that all the municipal bonds are independent of each other.What is the probability that the pension fund manager’s portfolio will have 5 or fewer defaults next year? 0.097 0.079 0.903 A jar contains 4 pieces of gum, 7 pieces of candy, and 3 pieces of mint. Each time you draw out an item, you record the outcome and put the item back in the jar before making another draw. Your friend drew two items and told you that neither of them was candy.What is the probability that the first item was a piece of gum? 0.425 0.568 0.571 A jar contains 4 pieces of gum, 7 pieces of candy, and 3 pieces of mint. Each time you draw out an item, you record the outcome and put the item back in the jar before making another draw.You draw two items. What is the probability that exactly one of them is a piece of candy? 0.231 0.500 0.538 My brother has two kids and one of them is a girl. What is the probability that he has two daughters? 0.250 0.333 0.500  Math Statistics and Probability IVEY 3306 Share QuestionEmailCopy link Comments (0)

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