List the following stocks and bonds in order from lowest default risk to highest default risk.

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The list of the stocks and bond in order from the lowest default risk to the highest default risk is as follows:

Foreign government bond, preferred stock, common stock.

Government bonds are generally referred to as a low risk investment as they have a very low chance of default.

Preferred shared holders are considered first in the disbursement of dividend before common stockholder are considered. Thus, preferred stock is of less risk than common stock.

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On any given day, mail gets delivered by either Alice or Bob. If Alice delivers it, which happens with probability 1/4 , she doe

Troyanec [42]

Answer:

(a) The value of fₓ (9.5) is 0.125.

(b) The value of fₓ (10.5) is 0.50.

Step-by-step explanation:

Let X denote delivery time of the mail delivered by Alice and Y denote delivery time of the mail delivered by Bob.

It i provided that:

$X\sim U(9, 11)\\Y\sim U(10, 12)$

The probability that Alice delivers the mail is, p = 1/4.

The probability that Bob delivers the mail is, q = 3/4.

The probability density function of a Uniform distribution with parameters [a, b] is:

$f(x)=\left \{ {{\frac{1}{b-a};\ a, b>0} \atop {0;\ otherwise}} \right.$

The probability density function of the delivery time of Alice is:

$f(X_{A})=\left \{ {{\frac{1}{b-a}=\frac{1}{2};\ [a, b]=[9, 11]} \atop {0;\ otherwise}} \right.$

The probability density function of the delivery time of Bob is:

$f(X_{B})=\left \{ {{\frac{1}{b-a}=\frac{1}{2};\ [a, b]=[10, 12]} \atop {0;\ otherwise}} \right.$

(a)

Compute the value of fₓ (9.5) as follows:

For delivery time 9.5, only Alice can do the delivery because Bob delivers the mail in the time interval 10 to 12.

The value of fₓ (9.5) is:

$f_{X}(9.5)=p.f(X_{A})+q.f(X_B})\\=(\frac{1}{4}\times \frac{1}{2})+(\frac{3}{4}\times0)\\=\frac{1}{8}\\=0.125$

Thus, the value of fₓ (9.5) is 0.125.

(b)

Compute the value of fₓ (10.5) as follows:

For delivery time 10.5, both Alice and Bob can do the delivery because Alice's delivery time is in the interval 9 to 11 and that of Bob's is in the time interval 10 to 12.

The value of fₓ (10.5) is:

$f_{X}(10.5)=p.f(X_{A})+q.f(X_B})\\=(\frac{1}{4}\times \frac{1}{2})+(\frac{3}{4}\times\frac{1}{2})\\=\frac{1}{8}+\frac{3}{8}\\=0.50$