Question

The average annual return over the period​ 1926-2009 for the​ S&P 500 is 11.511.5​%, and the...

The average annual return over the period​ 1926-2009 for the​ S&P 500 is

11.511.5​%,

and the standard deviation of returns is

20.1 %20.1%.

Based on these​ numbers, what is a​ 95% confidence interval for 2010​ returns?

A.

negative 1.4−1.4​%,

20.720.7​%

B.

negative 28.7−28.7​%,

72.472.4​%

C.

negative 28.7−28.7​%,

51.751.7​%

D.

negative 10−10​%,

3131​%

0 0
Add a comment Improve this question Transcribed image text
Answer #1

95% confidence interval for 2010​ returns = Mean - (2 * standard deviation) to Mean + (2 * standard deviation)

= 11.5% - (2 * 20.1%) to 11.5% + (2 * 20.1%)

= (11.5% - 40.2%) to (11.5% + 40.2%)

= -28.7% to 51.7%


95% confidence interval for 2010​ returns = -28.7% to 51.7%

Correct answer is option C.

FEEL FREE TO ASK DOUBTS... PLEASE RATE MY ANSWER

Add a comment
Know the answer?
Add Answer to:
The average annual return over the period​ 1926-2009 for the​ S&P 500 is 11.511.5​%, and the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT