1. Suppose X is a normally distributed random variable with mean 0.05 and variance (0.10)2. Compute the following Pr(X > 0.10) . Pr(X mu . x = 0.05 > sigma . x = 0.10 # Pr(X > 0. 10) > 1 - pnorm (0. 10, mu. x, sigma. x) [1] 0. 3085 # Pr (X pnorm (-0. 10, mu. x, sigma.x) [1] 0. 06681 # Pr (-0. 05 pnorm (0.15, mu. x, sigma. x) - pnorm (-0. 05, mu. x, sigma. x) [1] 0. 6827 # q. 01, q. 05, q. 95, q. 99 > qnorm (c (0 . 01, 0 . 05, 0 . 95, 0. 99) , mu.x, sigma. x) [1] -0. 1826 -0. 1145 0. 2145 0. 2826 2. Let X denote the monthly return on Microsoft Stock and let Y denote the monthly return on Starbucks stock. Assume that X ~ N(0.05, (0.10)?) and Y ~ N(0.025, (0.05)). . Using a grid of values between -0.25 and 0.35, plot the normal curves for X and Y. Make sure that both normal curves are on the same plot. . Comment on the risk-return tradeoffs for the two stocks