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%.

In later parts of the question we will ask:

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%?

What is the area between the mean and our actual score?