Over the past four years,a stock produced returns of 23 percent,-39 percent,4 percent,and 16 percent,respectively.Based on these four years,what range of returns would you expect to see 99 percent of the time?

Question

Quizplus · Accepted Answer

Average return = (0.23 - 0.39 + 0.04 + 0.16)/4 = 0.01σ² = [(0.23 - 0.01)² + (-0.3 - 0.01)² + (0.04 - 0.01)² + (0.16 - 0.01)²]/(4 - 1) = 0.077267σ = √0.077267 = 0.277969 99 percent probability range = 0.01 ± (3 × 0.277969)Range of returns = -82.39 percent to 84.39 percent

Over the Past Four Years,a Stock Produced Returns of 23