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 67% 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)-12.6%,29.8%

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 67% 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)-12.6%,29.8%

Quizplus · Accepted Answer

A 67% confidence interval for a normally distributed variable can be calculated as the mean plus or minus the standard deviation. Here, the mean (average annual return) is 11.7%, and the standard deviation is 20.5%. Therefore, the 67% confidence interval is 11.7% ± 20.5%, which gives us -8.8% to 32.2%.

Use the Table for the Question(s)below