Answer is -46.0% and 74.0%
Mean = 14.00%
Standard Deviation = 30.00%
95.44% Confidence Interval = [Mean - 2 * Standard Deviation,
Mean + 2 * Standard Deviation]
95.44% Confidence Interval = [14.00% - 2 * 30.00%, 14.00% + 2 *
30.00%]
95.44% Confidence Interval = [14.00% - 60.00%, 14.00% +
60.00%]
95.44% Confidence Interval = [-46.00%, 74.00%]
Problem 5-10 The continuously compounded annual return on a stock is normally distributed with a mean...
The continuously compounded annual return on a stock is normally distributed with a mean of 18% and standard deviation of 20%. With 95.44% confidence, we should expect its actual return in any particular year to be between which pair of values? Hint: Refer to Figure 5.3. −22.0% and 58.0% −12.0% and 58.0% −42.0% and 78.0% −2.0% and 38.0%
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