Hi Ray Vickson,
Thank you very much for your help! Although the question does not specify if the investment is compounded or not, I will have to assume it is not. To answer the Value at Risk component of the question I will need the variance/standard deviation for the return over the two years...
I am sorry. The VaR for an investment of $500,000 at 1% means the value that is at risk in that investment if we exclude the worst 1% of the outcomes.
The core of my problem/difficulty is understanding why one can model the expected value of an investment with 10% yearly returns that is held...
Homework Statement
Find the VaR for an investment of $500,000 at 1% given that the investment is expected to grow 10% every year with standard deviation of 35% and that the investment is held for two years.
Homework Equations
E(X + Y) = E(X) + E(Y)
E(X*Y) = E(X) * E(Y) (for independent...
Hi,
I am having a hard time understanding why the Addition Rule for two Random Variables holds even when the random variables are dependent.
Essentially: why is E(X+Y) = E(X) + E(Y) when X and Y are dependent random variable?
Given the two variables are dependent, if X happens to take on a...
Hi!
I am currently studying Probability Density Functions and I am having a hard time wrapping my head around something.
So, from what I have read, P(X=c), i.e. probability that the random variable X takes on any specific outcome, is equal to 0. Yet, the probability X takes on any outcome...
Hi,
I was trying to understand why the chain rule is needed to differentiate expressions implicitly.
I began by analyzing the equation used by most websites I visited:
e.g. x2+y2 = 10
After a lot of thinking, I got to a reasoning that satisfied me... Here it goes:
From my...
Hi,
I just learned about the First Fundamental theorem of calculus. From my understanding, it talks specifically about definite integrals. I was wondering if there is any sort of theorem that proves that the derivative of the indefinite integral of a function is equal to the function itself...
Thank you very much to both of you. As a matter of fact, I knew the "canned formula" but had never been introduced to the concept of chain rule through this way, hence, I had no idea I had to apply it here.
Thank you once again and sorry for deleting the template.
I forgot to add (and this might answer your question, Zondrina) that, my first instinct was the following: If y is equal to the integral of 1/t, then the derivative of y should be equal to 1/t. But, if I went on and substituted 1/2 into the equation, I would be left with 1/2, which is not equal...
The question is the following:
y = (lower limit 0, upper limit e2x)∫ (1/T)
Find y'(2)
According to the markscheme, the answer is equal to 4e2. I got 2e2.
I did the following:
I integrated the expression, which yielded: 2√t. I then substituted the upper and lower limits in, which...
So, I have to assess the relationship between the Constant of a Spring and the Time Period of Oscillations.
I have researched the equation that links the two and I know that to have a straight line graph I need to plot:
T2 against 1/K
However, I do not know why; how I get to that conclusion...