Average return and standard deviation of its returns

Assignment Help Financial Management

Reference no: EM131541453

You observe a portfolio for five years and determine that its average return is 11.5% 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 ___ %.

A) No, you cannot be confident that the portfolio will not lose more than 30% of its value next year. This is because hte low end of the prediction interval is greater than -30%

B) No, you cannot be confident that the portfolio will not lsoe more than 30% of its value next year. This is because the low end of the prediction interval is less than -30%.

C) Yes, you can be confident that the portfolio will not lose more than 30% of its value next year.This is because hte low end of the prediction interval is greater than -30%

D) 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%

Reference no: EM131541453

Questions Cloud

Equilibrium price ratio and equilibrium final allocation : Using your answer to part (a), what is the equilibrium price ratio and the equilibrium final allocation?

Describe the contract curve : Using a fully-labeled Edgeworth box, or using mathematics, describe the contract curve (the set of efficient allocations) for this economy.

How might an allegation questioning your academic integrity : Now that you have conducted some preliminary research, how might an allegation questioning your academic integrity impact your future?

Create risk information sheet for five potential risks : At least three of the risks you choose should be business continuity and IT disaster recovery related. As part of this, consider man-made and natural risks.

Average return and standard deviation of its returns : You observe a portfolio for five years and determine that its average return is 11.5% and the standard deviation of its returns in 19.5%.

What were ambers ethical obligations to jerome : Was Amber's suggestion that Jerome consider re-signing appropriate? Why or why not?

What do you want to do in your career : What do you want to do in your career? Discuss in detail what your personal goals and aspirations are for your professional career

Suppose we observe a sustained increase in the price : Suppose we observe a sustained increase in the price of gas, then we can predict that gas sellers (ceteris paribus) will get (higher/lower) revenues.

Tax code that might increase private saving : Consider a change in the tax code that might increase private saving. If this policy were implemented, how would it affect the market for loanable funds?

User Account

All Pages