Question 4
10 / 10 points
According to Investment Digest ("Diversification and the Risk/Reward Relationship", Winter 1994, 1-3),
the mean of the annual return for common stocks from 1926 to 1992 was 16.5%, and the standard
deviation of the annual return was 19%.
a. What is the probability that the stock returns are greater than 0%?
b. What is the probability that the stock returns are less than 18%?

Question 5
10 / 10 points
Match the term to its definition.

__2__ Cluster
__3__ Population
__1__ Stratum
1. A category composed of people with certain similarities, such as gender, race, religion, or even grade
level. Each person belongs to only one group. A simple random sample of equal size is taken from each
group.
2. A division of the population into separate physical units such as districts, neighborhoods, or streets.
Each person belongs to only one unit.
A simple random sample is taken from the units.
All people
within the selected units are surveyed.