Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you observe a portfolio for five years and determi

You observe a portfolio for five years and determine that its average return is 11.2%...

90.2K

Verified Solution

Question

Accounting

You observe a portfolio for five years and determine that its average return is 11.2% and the standard deviation of its returns in 19.9%. Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is __%.

(Enter your response as a percent rounded to one decimal place.)

A. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than minus30%.

B.Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than minus30%.

C.No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than minus30%.

D.Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than minus30%.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students