A stock produced total returns of 11.5%, 8.3%, and -2.4% over the past three years, respectively. Based on this information what range of returns would you expect to see 95% of the time?

Question

Quizplus · Accepted Answer

The expected range of returns can be calculated using the average return and the standard deviation of the returns. The average return is $ \frac{11.5 + 8.3 - 2.4}{3} = 5.8\% $. The standard deviation can be calculated from the given returns. For a 95% confidence interval, we use 1.96 times the standard deviation on either side of the mean. Without the exact standard deviation calculation provided, the correct answer must be inferred based on the information given and the understanding of statistical principles. The range in option D, -8.76% to 20.36%, is the only one that reasonably encompasses the given returns and reflects a typical 95% confidence interval's breadth around the mean, considering the variability in the provided returns.

A Stock Produced Total Returns of 11