Assignment 1 1. Two people (Chris and Mike) with the same loss distribution Qutcome Rrobability. $1,0000.20 $00.80 a. Calculate expected loss and standard deviation for Chris. Assume losses are uncorrelated b. Calculate the expected value and standard deviation of the loss per person with pooling c. Compare the results of 1 and 2 in terms of expected loss and standard deviation of loss, what are lessons learned? 2. Using the following data determine what level of loss control spending should be undertaken? 2. Using the following data determine what level of loss control spending should be undertaken? 3. Assume E(r1)=5%;s1=.4,X1=.20(sisstd.dev.,Xisweight)E(r2)=5%;s2=.4,X2=.80. Correlation between security 1 and security 2 is -1 Please calculate portfolio mean and variance, respectively. 4. Calculate NPV based on the CFs below. (Discount rate is 8% )