You observe a portfolio for five years and determine that its average return is 11.8% and the standard deviation of its returns in 19.5%. Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is %. (Enter your response as a percent rounded to one decimal place.) O A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than 30%. O B. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%. OC. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%. O D. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than - 30%.
You observe a portfolio for five years and determine that its average return is 11.8% and the standard deviation of its returns in 19.5%. Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the 95% prediction interval is %. (Enter your response as a percent rounded to one decimal place.) O A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than 30%. O B. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%. OC. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is less than 30%. O D. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is greater than - 30%.
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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Question
51.
Subject
Finance
Transcribed Image Text:You observe a portfolio for five years and determine that its average return is 11.8% and the standard deviation of its returns in 19.5%. Would a 30% loss next
year be outside the 95% confidence interval for this portfolio?
The low end of the 95% prediction interval is %. (Enter your response as a percent rounded to one decimal place.)
O A. Yes, you can be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval is
greater than - 30%.
B. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval
is less than -30%.
OC. Yes, you can confide
less than - 30%.
he portfolio will not lose more than 30% of its lue next year. This is because the low end of the prediction terval is
D. No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because the low end of the prediction interval
is greater than - 30%.
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