Quick Wit Investment Bank (QWIB) requested your assistance is assessing the equity risk premium of their Equity Line (EL) product. The risk premium of the EL product is normally distributed with a population mean of 6 per cent and a population standard deviation of 18 percent. Over the last four years EL has averaged -2%. A major investor is disgruntled with the performance of EL and complained that QWIB's investment strategies are underperforming. Provide responses to the following questions to assist QWIB.

a) What test should be used to calculate the confidence interval?

b) Calculate a 95 per cent confidence interval for the population mean and interpret the results.

c) Calculate the 99 per cent confidence interval for the population mean and interpret the results.

d) Explain the difference between the results pf parts (b) and (c).

e) What is the probability of a -2.0 per cent or lower average return over a four-year period?

f) What is your response to the investor's concern?