Suppose x1 N(2, 0.5) and x2 N(8, 14). The correlation between x1 and x2 is 0.3.

Question:

Suppose x1∼ N(2, 0.5) and x2 ∼ N(8, 14). The correlation between x1 and x2 is −0.3. What is the distribution of x1+ x2? Compute the distribution of x1− x2?

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...