1. Suppose the return on a diverse investment is normally distributed has a mean of 7.2 and standard deviation 8.1. What is the 50th percentile of return ? Note that based on the shape of the normal distribution the 50th percentile is the mean.

(the 50th percentile is clearly z=0, so it is 0 standard deviations from the mean)

2. Consider the following sample

7.4,

11.8,

13.5,

17.9,

587.9

Be careful with this question select every correct answer.

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a.The mean is not close to the median so it is NOT reasonable to assume the data is normally distributed

b.the median of the sample (the 50th percentile) is 13.50

c.The average of the sample is 126.0

d.The average of the sample is 127.7

e.The mean is not close to the median so it is reasonable to assume the data is normally distributed

f.the median of the sample (the 50th percentile) is 16.9

3. It is often said that the return from investing in gold is negatively correlated with the return of share price

What does this tell you?

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Select one:

a.

When the profit from investing in shares is low the profit from investing in gold is high

b.

When the profit from investing in shares is low the profit from investing in gold is low

4. If the return from investing in coal mining company A is positively corelated to the return from investing in coal mining company B

What does this tell you

optional click here for an explanation of investing

Select one:

a.

When the profit from investing incompany A is low the profit from investing in company B is low

b.

When the profit from investing incompany A is low the profit from investing in company B is high