1. You buy a stock for $130, receive a dividend of $12 and sell the stock for $90 one year later. What is your dollar and percent return? Later you learn inflation was 5% during the period you owned the stock. What was your real percentage return?

2. Imagine a small company over the past 25 years has provided an arithmetic average return of 12.5%, with a standard deviation of 3.00%. What is the possible range of returns that captures 95% of all possible outcomes if the company was to perform as it has in the past.