c.Finally, determine whether a return of 14% would fall within each of the six confidence intervals. (4 marks)

Complete the table below with your calculated ranges/confidence intervals.

Computroids:

Confidence interval

Bottom of range

Top of range

Includes a 14% return*

68%

Yes/No

95%

Yes/No

99%

Yes/No

Blazers:

Confidence interval

Bottom of range

Top of range

Includes a 14% return*

68%

Yes/No

95%

Yes/No

99%

Yes/No

*This is the same as asking whether a return of 14% has less than the stated probability to occur by chance for that security. If a 14% return is not inside the 68% CI, it's somewhat unlikely to occur, since it will only occur by chance 32% of the time. Of course, the 99% CI is much more likely to include the observed return simply by chance. A 14% return will fall outside the 99% CI only 1% of the time (quite rare compared to the 32% for the 68% CI.)