Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

* Assume that the daily stock volatility is 1 1 1 basis points and that you have a stock - picking ability that earns you

*Assume that the daily stock volatility is 111 basis points and that you have a stock-picking ability that earns you an extra 4.0% per year relative to your benchmark. Assume there are 250 trading days per year. You can statistically "prove" your stock picking ability by generating a t-statistic above 2.0. The t-statistic is calculated as your average excess return divided by the volatility of return. How many years is it expected to take to prove your ability? Give your answer in years to the nearest 0.1 year.
Selected Answer:
Correct 77
Correct Answer:
Correct 77.0\pm 0.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Technical Analysis Of Stock Trends

Authors: Robert D. Edwards, John Magee

6th Edition

1599180219, 978-0139043437

More Books

Students also viewed these Finance questions

Question

What did I learn from this exercise?

Answered: 1 week ago