If the Canadian bond market's historical average return and standard deviation were 8% and 11%, respectively, what is the expected return next year using a 68% confidence interval?
A) -3% to 19%
B) 8% to 11%
C) -14% to 30%
D) -25% to 41%

Question

Quizplus · Accepted Answer

The 68% confidence interval for a normal distribution is within one standard deviation of the mean. Therefore, the expected return is 8% ± 11%, which results in a range of -3% to 19%.

If the Canadian Bond Market's Historical Average Return and Standard