PROBABILITY DISTRIBUTION

BY

: SAHIL B 71 TALWAR

SEC ROLL NO.

UTI Mutual fund

1. UTI Income Plan: This is a hybrid fund in which allocation to equity which may go up to maximum 40%. This is ideal for a predominantly fixed income investor with a marginal appetite for equity risk.

2. UTI Liquid Fund:

This fund belongs to the family of Liquid Funds. The fund is managed with a relatively conservative approach to credit risk as compared to other liquid funds .

RETURNS :

UTI mutual funds(annual returns(%))

P(xi yi) Years

UTI Income Fund(X)

UTI Liquid Fund (y)

0.2 1st year

0.5 2nd year 0.3 3rd year

4.17
9.01 6.89

3.41
5.98 4.59

E(x) E(y)
RESULT :

7.403 5.356

Fund x will give 7.403% returns whereas Fund y will 5.356% returns on certain amount of money .

Variance(X) variance(y)

1.423154321 0.42

CONCLUSION : As Fund x gives higher returns it is subject to more variability & the problem of loss is also higher than Fund Y .

Covariance :

2.3516

RESULT :

Since the covariance is positive , there is a positive relationship between two funds.

EXPECTED VALUE OF THE SUM OF TWO RANDOM VARIABLES E(X+Y)= E(X)+E(Y)

12.643

Variance:
Var(x+y)=

varX*varX+ varY*varY+2varXY
= 4.27

Standard Deviation =1.62

Portfolio Risk : Suppose 40% of the portfolio is invested in X and 60% is in invest in Y, then
E(P) = 5.162

Var(P) = 1.27

Thank You