-30.9%, 53.5% A -1.5%, 21.4% B -10.8%, 32.1% C 30.9%, 74.9% D The average annual return...

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Question

The average annual return over the period 1926-2009 for the S&P 500 is 11.3%, and the standard deviation of returns is 21.1%. -30.9%, 53.5% A

-1.5%, 21.4% B

-10.8%, 32.1% C

30.9%, 74.9% D

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Answer 1

Answer #1

Answer :

Given that,

Average annual return = 11.30%

Standard deviation = 21.10%

Now,

95% confidence interval = ( Average return - 2 * Standard deviation , Average return + 2 * Standard deviation )

= ( 0.1130 - 2 * 0.2110 , 0.1130 + 2 * 0.2110 )

= ( - 0.309 , 0.535 )

95% confidence interval = ( - 30.9% , 53.5% )

The answer is option (A) i.e., - 30.9% , 53.5%

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Answer 2

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-30.9%, 53.5% A -1.5%, 21.4% B -10.8%, 32.1% C 30.9%, 74.9% D The average annual return...