(A)Use @Risk with 100 Replications,provide a Summary Statistics of Portfolio

question 61

Essay

(A)Use @Risk with 100 replications,provide a summary statistics of portfolio return; namely,minimum,maximum,mean,and standard deviation.
(B)Use your answers to (A)to estimate the probability that Mrs.Smart's portfolio's annual return will exceed 20%.
(C)Use your answers to (A)to estimate the probability that Mrs.Smart's portfolio will lose money during the course of a year.
(D)Suppose that the current price of each stock is as follows: stock 1: $16; stock 2: $18; stock 3: $20; and stock 4: $22.Mrs.Smart has just bought an option involving these four stocks.If the price of stock 1,six months from now are is $18 or more,the option enables Mrs.Smart to buy,if she desires,one share of each stock for $20 six months from now.Otherwise the option is worthless.For example,if the stock prices six months from now are: stock 1: $18; stock 2: $20; stock 3: $21; and stock 4: $24,then Mrs.Smart would exercise her option to buy stocks 3 and 4 and receive (21- 20)+ (24-20)= $5 in each cash flow.How much is this option worth if the risk-free rate is 8%?

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Definitions:

Brazelton Assessment

A developmental test for infants, measuring their physical and neurological responses to understand their developmental progress.

Dizygotic Twins

Twins that are born from separate eggs, fertilized by separate sperm, resulting in siblings that are genetically distinct, much like ordinary brothers or sisters.

Genes

Units of heredity made up of DNA, acting as instructions to make molecules called proteins, which play an essential role in determining the physical and functional traits of an organism.

Base Pairs

the building blocks of the DNA double helix, consisting of adenine (A) paired with thymine (T), and guanine (G) paired with cytosine (C).