Question

A research analyst is examining a stock for possible inclusion in his client's portfolio. Over a 10-year period, the sample mean and the sample standard deviation of annual returns on the stock were 22% and 11%, respectively. The client wants to know if the risk, as measured by the standard deviation, differs from 21%. (You may find it useful to reference the appropriate table: chi-square table or F table)

a. Construct the 95% confidence intervals for the population variance and the population standard deviation. (Round intermediate calculations to at least 4 decimal places and final answers to 2 decimal places.)

Confidence Intervals

Population variance _______to_______

Population standard deviation _________to________

Answer 1