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w can you work this out in Excel? pose that we have an investment with an annual return of 10% and an dard deviation of 25%. r a one-year period, what range of returns can we expect with approxi confidence? -15.36% to 55.36% 5% to 45% -23.45% to 56.78% -40% to 60%

w can you work this out in Excel? pose that we have an investment with an annual return of 10% and an dard deviation of 25%. r a one-year period, what range of returns can we expect with approxi confidence? -15.36% to 55.36% 5% to 45% -23.45% to 56.78% -40% to 60%

Essentials Of Investments
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
Section: Chapter Questions
Problem 1PS
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How can you work this out in Excel? Suppose that we have an investment with an annual return of 10% and an annual standard deviation of 25%. Over a one-year period, what range of returns can we expect with approximately 95% confidence? 1.-15.36% to 55.36% 2.5% to 45% 3.-23.45% to 56.78% 4. -40% to 60%
Transcribed Image Text:How can you work this out in Excel? Suppose that we have an investment with an annual return of 10% and an annual standard deviation of 25%. Over a one-year period, what range of returns can we expect with approximately 95% confidence? 1.-15.36% to 55.36% 2.5% to 45% 3.-23.45% to 56.78% 4. -40% to 60%
Expert Solution
Step 1: Define=return and volatility

Return in stock markets tend to be volatile and changing and there is upper limit and lower limits which depend on mean return and standard deviation.

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