Alex has two funds A and B. The annual return of fund A is denoted by...

Alex has two funds A and B. The annual return of fund A is denoted by X (in %) while the annual return of fund B is denoted by Y (in %) . Assume X ∼ U (−10, 20) and Y ∼ N (10, 50). Further, suppose the probability that both stocks A and B have positive annual returns is 0.6.

Find the probability that stock A has a negative return.
Find the probability that stock B has a positive return.
Find the probability that stock B has a positive return but stock A has a negative return.
Find the probability that stock A has a negative return, given that stock B has a positive return.
Find the probability that both stocks A and B have negative returns.

I would appreciate if the expert can write down some explanations for the more complicated steps so that I can understand how they derive that step. Thanks!

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Expert Solution

orchestra answered 1 year ago

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