Use the table for the question(s) below.
Consider the following realized annual returns:
-Suppose that you want to use the 10 year historical average return on the S&P 500 to forecast the expected future return on the S&P 500.The 95% confidence interval for your estimate of the expect return is closest to:

Question

Use the table for the question(s) below.
Consider the following realized annual returns: 
-Suppose that you want to use the 10 year historical average return on the S&P 500 to forecast the expected future return on the S&P 500.The 95% confidence interval for your estimate of the expect return is closest to:

Quizplus · Accepted Answer

D) R_annual= 11ea7db1_bcc9_8cba_b9bd_79492cc7676a_TB1619_11 = 11ea7db1_bcc9_8cbb_b9bd_39c1eab7c597_TB1619_11 = 8.8% 11ea7db1_bcc9_8cbc_b9bd_3de777fa5348_TB1619_00 Variance = SUM of (R - R)²/ T - 1 = 0.3405116 / 9 = 0.0378346 Standard deviation = 11ea7db1_bcc9_b3cd_b9bd_757c2fe484dd_TB1619_11 = 11ea7db1_bcc9_b3ce_b9bd_654a33c185e2_TB1619_11 = 0.1945112 Standard error = Standard Deviation / T = 0.1945112 / 10 = .01945 or 1.95% 95% Confidence Interval = mean return + or - 2 standard errors, so lower bound = .0878 - 2 × .0195 = 0.0488 upper bound = .0878 + 2 × .0195 = .1268

Use the Table for the Question(s) Below