1. An investor with $10,000 to invest has the following options: (1) invest in a risk free savings account with a guaranteed 3% annual rate of return; (2) invest in a fairly safe stock where the possible annual rates of return are 6%, 8% or 10%; (3) invest in a more risky stock where the possible annual rates of return are 1%, 9% or 17%. The investor can place all the funds into any one option, or split into two $5000 investments into any two of the options. The joint probability distribution for the safe and risky stocks are:

			Risky stock return (R)
			R=1%	R=9%	R=17%
Safe stock return (S)		S=6%	0.10	0.05	0.10
		S=8%	0.25	0.05	0.20
		S=10%	0.10	0.05	0.10

Assuming the investor is an EMV maximizer, which strategy should the investor use? Explain thoroughly.

1. For a random sample of 50 cans of peaches: x = 16.1 ounces and s= 0.1 ounces
   1. Find the 95% confidence interval for the mean
   2. Find the 95% confidence interval for the mean if the sample size was only 20
   3. What sample size at the 95% level is necessary to get the maximum error down to 0.005 ounces?