1. You have $16124 to invest in a stock portfolio. Your choices are Stock X with an expected return of 15 percent and Stock Y with an expected return of 7 percent. If your goal is to create a portfolio with an expected return of 11.8, how much money will you invest in Stock X?
2. The amount of a loss is exponentially distributed with mean 50. Insurance pays 70% of the amount of a loss in excess of an ordinary deductible of 20. The maximum payment is 63 per loss. Determine the expected payment, given that a payment has been made.