[Investment Planning] Temoc is a high tech company that hasrecently gone public, and trades using the symbol TEMO. Comet is arival high tech company that has also recently gone public, andtrades using the symbol COME. Currently, the price of one share ofeach company is $10. Based on extensive market research andfinancial analysis, you have forecast that the price of one shareof TEMO one year from now can be modeled as a normal distribution,with mean $12 and standard deviation $3. To put this formally, let???? (1) represents the price of one share of TEMO one year fromnow. Then, ???? (1) ~ N(12, 3). Similarly, you have forecast that???? (1) ~ ?(12, 4). Also, assume that the two stocks areindependent of each other.
Investor B’s portfolio consists of 300 shares of TEMO and 400shares of COME. What is the probability that Investor B’s portfoliois worth more than $8,000 one year from now? (a) 0.414 (b) 0.436(c) 0.564 (d) 0.586
