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3.) You explore the returns of the German stock company Rheinmetall which constructs weapons for the NATO. The following graph shows the evolution of the
3.) You explore the returns of the German stock company Rheinmetall which constructs weapons for the NATO. The following graph shows the evolution of the daily stock return over the period 29.6.2021 to 28.6.2022: Imagine that you work as an analyst at a large bank in Helsinki (Nordea) and you have only data on the first subsample available (e.g., 29.6.2021 to 23.12.2021). You analyze the data with some standard statistical software and obtain the following output: You have possibly heard in some class at University the following argumentation: Because we have 128 observations available and the Jarque-Bera test indicates that we cannot reject the normal distribution as the underlying data generating process (p-value >5% ), we can apply the Central-Limit-Theorem and the Law-of-Large-Numbers and assume that the mean is normally distributed too. Hence, you can tell your investors that if they buy that stock, they can expect to receive a payoff of 1.21%. Since you attended Dr. Klaus Grobys class, however, you know that this is not true. So, what is the problem with this argumentation? ( 2 points)
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