(Requires Calculus $\frac { p ( 1 - p ) } { n }$

question 8

Essay

(Requires calculus.)Let Y be a Bernoulli random variable with success probability Pr(Y = 1)= p. It can be shown that the variance of the success probability p is $\frac { p ( 1 - p ) } { n }$ Use calculus to show that this variance is maximized for p = 0.5.

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Par Value

Par value is the nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which may differ significantly from its market value.

Debt Investments-HTM

Investments in debt securities that are held to maturity, meaning the investor plans to hold the securities until they are paid off at their maturity date.

Stock Investments

Securities representing equity or ownership interest in a corporation, allowing investors to gain dividends and potentially capital gains.

Fair Value

An estimate of the market value of an asset or liability, based on the price that two willing parties would agree to in an arm's length transaction.