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4- X and Y are joint continuous random variables and their joint p-d-f.pdf

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3. Of all current assets, inventory is usually the least liquid. The bank would have to service a loan for inventory, making regular on-site visits to confirm that the inventory still exists. There is also the possibility that, particularly in the technology industry, inventory could be rendered obsolete overnight. Would the rates be significantly higher on an inventory loan than the rates on a loan for another asset and under what circumstances is a bank most and least likely to grant.

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4. X and Y are joint continuous random variables and their joint p.d.f. is given by Let W be the continuous random variable distributed by W = X + Y . (a) Find the p.d.f. of W using the Distribution Function Technique. Be sure to determine where this p.d.f. is non-trivial. (10 pts.). (b) Find P ( 0 < W < 2 1 ) ( 5 pts. )

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