Help how to factory reset

[rt2]

I'm running non-rooted but w/the ota update. Up until this morning everything has been running fine but my phone is locking up and freezing.
Pulled the battery a few times but the problem returns.

So, a couple of questions:

1. Would a factory reset return my phone to the original phone settings as it was when it was shipped? Just for future reference, what is the procedure to reset to factory?

2. Since I've got the ota installed I'm assuming that a factory reset won't remove the ota. Correct? In which case I'll have to do the PB31I.zip revert. Correct?

Thanks for whatever help you can offer me.