A stock returned 13 percent,18 percent,-16 percent and -1 percent annually for the past four years.Based on this information,what is the 99.74 percent probability range for any one given year?
A)-8.4 to 11.7%
B)-16.1 to 22.6%
C)-24.5 to 34.3%
D)-42.4 to 49.4%
E)-54.8 to 61.3%

Question

Quizplus · Accepted Answer

Mean = (.13 + .18 - .16 - .01)/4 = .035Total squared deviation = (.13 - .035)² + (.18 - .035)² + (-.16 - .035)² + (-.01 - .035)² = .0701Standard deviation = √.0701/(4 - 1)= .1529 = 15.29%99.74% probability range = 3.5% ± (3 × 15.29%)= -42.4 to 49.4%

A Stock Returned 13 Percent,18 Percent,-16 Percent and -1 Percent