can you send answers in excel format Problem $1($bidding problem$)$

Posted on the web board as Excel worksheet $($P$1$ Financial services$).$

Problem $2($investment problem $)$

Posted on the web board as Excel worksheet $($P$2$ Investment portfolio$).$ P$2$ Comparing Investments

Suppose that you are managing the financial portfolio of a large municipality and

must allocate all your investment between a domestic and foreign mutual fund.

Imagine that the returns of the two funds are similar, but independent. Namely,

the likelihood of one going up or down is not affected by what the other one does.

Return of the domestic fund is following normal distribution with the mean of $10\%$ and a

standard deviation of $10\%,$ while foreign fund return is normally distributed with the

mean of $20\%$ and standard deviation of $25\%.$

Consider the following strategies:

Invest all in the domestic fund.

Invest all in the foreign fund.

Combine funds.

Comment on returns using the above strategies. FINANCIAL SERVICES, Bidding Example

The cable company CC is bidding for the one year financial service contract to a large brokerage house.

The service would include data base services and network services.

The cost of data base services is most likely to be $$450K,$ but could go as high as $$500K,$ or as low as $$250K.$

The network services are even harder to estimate. However, during previous projects similar type of networks

were provided at the following costs:.

Network Costs in thousands of $$.$

There is only one competitor Globtel, and it is estimated that their bids for such projects have normal distribution

with mean $$900K$ and standard deviation $$50K.$

a$)$ CC is considering a bid of $$950K.$ Simulate this bid. Comment on this bid. What is the likelihood of having a loss.

b$)$ Run sensitivity analysis with the following CC bid values $($in thousands of $$)$:

$$800$

$$850$

$$900$

$$950$

$$1,000$

What can you conclude from your results? Advice on the bidding amount. Justify your answer.