1. Given that Dov Pharmaceuticals was down by 98% for 2006, why did some investors hold the stock? Why didnt they sell out before the price declined so sharply? (Answer should be approximately 150 words)

1. Your stock investments return 8%, 12%, and -4% in consecutive years.
2. What is the geometric return?

• What is the sample standard deviation of the above returns?
• Using the standard deviation and mean that you just calculated, and assuming a normal probability distribution, what is the probability of losing 3% or more?