question 12:

The risk of a portfolio can be lower than the risk of the twoindividual components that make up the portfolio when

	a.	the return of the two components are negatively related.
	b.	the return of the two components are positively related.
	c.	the risk of one of the components is much lower than the risk ofthe other.
	d.	the risk of one of the components is much higher than the riskof the other.
	e.	the expected return of one of the components is much higher thanthe expected return of the other.
	f.	the expected return of one of the components is much lower thanthe expected return of the other.

Question 1:
From past experience, we know that there are 14% of freshmen, 25%of sophomores, 32% of juniors and the remaining are seniors at NAU.We also know that 21% of the freshmen, 22% of the sophomore and 11%of the juniors have taken BA 201. Also 86% of the general studentpopulation at NAU have not taken BA 201. If we randomly ask astudent from NAU and find out that she has NOTtaken BA201, what is the probability (in percentage) that she is afreshman? Use Excel to solve. Hint: (1)Use Excel to setup the joint probability table; (2) Notice that21%, 22% and 11% are the conditional probabilities NOTjoint probabilities; (3) just enter the value without the % sign inthe answer box.

Question 2:

When two events are collectively exhaustive and mutuallyexclusive, which of the following are always true? (2 correctanswers)

	a.	P(A or B) = 0
	b.	P(A or B) = 1
	c.	P(A and B) = 0
	d.	P(A and B) = 1
	e.	P(A|B) = P(A)
	f.	P(A|B)= P(A) * P(B)

Question 4:

When there are only two possible events A and B that aremutually exclusive, which of the following is(are) always true? (2correct answers)

	a.	P(A or B) = 0
	b.	P(A or B) = 1
	c.	P(A and B) = 0
	d.	P(A and B) = 1
	e.	P(A|B) = P(A)
	f.	P(A|B) = P(B)
	g.	P(A and B) = P(A) * P(B)

Question 5:

When there are more than two events and they are statisticallyindependent, which of the following is(are) always true? (2 correctanswers)

	a.	P(A or B) = 0
	b.	P(A or B) = 1
	c.	P(A and B) = 0
	d.	P(A and B) = 1
	e.	P(A|B) = P(A)
	f.	P(A and B) = P(A) * P(B)