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 IBM to forecast the expected future return on IBM.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 IBM to forecast the expected future return on IBM.The 95% confidence interval for your estimate of the expect return is closest to:

Quizplus · Accepted Answer

B) R_annual= 11ea7db1_bcc9_dadf_b9bd_17467b88b90d_TB1619_11 = 11ea7db1_bcc9_dae0_b9bd_ed1601c18c9f_TB1619_11 = 16.45% 11ea7db1_bcc9_dae1_b9bd_57cbabc062c3_TB1619_00 Variance = SUM of (R - R)²/ T - 1 = 0.9907165 / 9 = 0.1100796 Standard deviation = 11ea7db1_bcc9_dae2_b9bd_6d269921f052_TB1619_11 = 11ea7db1_bcc9_dae3_b9bd_7bc0cea32e7f_TB1619_11 = 0.3317825 Standard error = Standard Deviation / T = 0.3317825 / 10 = .03318 or 3.32% 95% Confidence Interval = mean return + or - 2 standard errors, so lower bound = .1638 - 2 × .0332= .101 upper bound = .1638 + 2 × .0332 = .227

Use the Table for the Question(s) Below