Use the table for the question(s)below.
Consider the following realized annual returns:

-The average annual return over the period 1926-2009 for the S&P 500 is 11.7%,and the standard deviation of returns is 20.5%.Based on these numbers,what is a 95% confidence interval for 2010 returns?
A)1.5%,,22.0%
B)-8.8%,32.2%
C)-29.3%,52.7%
D)-29.3%,73.2%
E)-14.4%,26.2%

Question

Use the table for the question(s)below.
Consider the following realized annual returns:
 
-The average annual return over the period 1926-2009 for the S&P 500 is 11.7%,and the standard deviation of returns is 20.5%.Based on these numbers,what is a 95% confidence interval for 2010 returns?
A)1.5%,,22.0% 
B)-8.8%,32.2% 
C)-29.3%,52.7% 
D)-29.3%,73.2% 
E)-14.4%,26.2%

Quizplus · Accepted Answer

A 95% confidence interval is calculated as the mean plus or minus 1.96 times the standard deviation. Here, it is 11.7% ± (1.96 * 20.5%), which gives the interval -29.3% to 52.7%.

Use the Table for the Question(s)below