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

Quizplus · Accepted Answer

D) 11ea7e54_8c31_118b_ba34_1b8cf5fd3286_TB1620_00 11ea7e54_8c31_118c_ba34_0107e97b54a2_TB1620_00 Variance = SUM of 11ea7e54_8c31_389d_ba34_013716370b27_TB1620_11 / T - 1 = 0.3405116 / 9 = 0.0378346 11ea7e54_8c31_389e_ba34_edccaf5f8ba6_TB1620_00 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