Ten annual returns are listed in the following table. 1 -19.9% 2 % 3 4 16.7% 19% -50% % to 5 6 (a) What is the average annual return over the ten-year period (as a percent)? % 7 % 43.2% 1.3% -16.4% 8 9 -45.5% 45.1% (b) What is the standard deviation of annual returns over the ten-year period (as a percent)? (Round your answer to two decimal places.) 10 -4% (c) What is the 95% confidence interval on the return of this stock next year (as a percent) if the past average returns and volatility of returns are unbiased estimators of expected returns and future volatility. (Round your answers to two decimal places.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Ten annual returns are listed in the following table.
1
-19.9%
2
%
3
4
16.7% 19% -50%
% to
5
6
(a) What is the average annual return over the ten-year period (as a percent)?
%
7
%
43.2% 1.3% -16.4%
8
9
-45.5% 45.1%
(b) What is the standard deviation of annual returns over the ten-year period (as a percent)? (Round your answer to two
decimal places.)
10
-4%
(c) What is the 95% confidence interval on the return of this stock next year (as a percent) if the past average returns
and volatility of returns are unbiased estimators of expected returns and future volatility. (Round your answers to two
decimal places.)
Transcribed Image Text:Ten annual returns are listed in the following table. 1 -19.9% 2 % 3 4 16.7% 19% -50% % to 5 6 (a) What is the average annual return over the ten-year period (as a percent)? % 7 % 43.2% 1.3% -16.4% 8 9 -45.5% 45.1% (b) What is the standard deviation of annual returns over the ten-year period (as a percent)? (Round your answer to two decimal places.) 10 -4% (c) What is the 95% confidence interval on the return of this stock next year (as a percent) if the past average returns and volatility of returns are unbiased estimators of expected returns and future volatility. (Round your answers to two decimal places.)
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