Question
A stock has earned average monthly returns of 0.73%with a standard deviation of 14.92%during the past 5 years. Assuming that montly stock returns of individual
A stock has earned average monthly returns of 0.73%with a standard deviation of 14.92%during the past 5 years. Assuming that montly stock returns of individual stocks are normally distributed and that future returns are expected to follow the same distribution as past realized returns, what is the 99.7% confidence interval for this stock's future monthly returns? (Hint: Remember the 68-95-99.7% rule we covered in class: that % of observations fall within 1, 2, 3 sigmas around the mean, respectively. Do not press enter / submit until after you put your answer in both boxes
below!)
There is a 99.7% chance that future monthly stock returns will fall between a minimum of ___% and a maximum of ___%.
(Round to two decimal points.)
A stock has earned average monthly returns of 0.73% with a standard deviation of 14.92% during the past 5 years. Assuming that monty stock returns of individual stocks are normally distributed and that future returns are expected to follow the same distribution as past realized returns, what is the 99.7% confidence interval for this stock's future monthly returns? (Hint: Remember the 68-95-99.7% rule we covered in class: that % of observations fall within 1, 2, 3 sigmas around the mean respectively. Do not press enter / submit until after you put your answer in both boxes below!) There is a 99.7% chance that future monthly stock returns will fall between a minimum of % and a maximum of Round to two decimal pointsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started