Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Month Return -1 -12.11% -2 10.84% -3 -6.14% -4 -1.28% -5 -15.66% -6 -2.85% -7 4.11% -8 -7.31% -9 4.59% -10 5.72% -11 -2.10% -12

Month Return -1 -12.11% -2 10.84% -3 -6.14% -4 -1.28% -5 -15.66% -6 -2.85% -7 4.11% -8 -7.31% -9 4.59% -10 5.72% -11 -2.10% -12 -8.65% -13 -5.96% -14 -10.94% -15 0.00% -16 0.97% -17 15.94% -18 -9.65% -19 1.12% -20 -4.07% -21 -2.97% -22 -9.57% -23 -5.20% -24 -1.15% -25 13.41% -26 -2.47% -27 0.73% -28 0.39% -29 1.04% -30 17.58% -31 -1.23% -32 -13.40% -33 18.90% -34 -3.96% -35 14.27% -36 5.57% -37 3.04% -38 -3.54% -39 11.12% -40 -3.50% -41 -4.73% -42 10.29% -43 -4.37% -44 2.83% -45 12.86% -46 3.29% -47 9.97% -48 -0.54% -49 -10.53% -50 -1.60% -51 8.99% -52 -2.11% -53 -1.19% -54 10.88% -55 0.32% -56 5.62% -57 -0.67% -58 14.29% -59 -5.05% -60 8.82%

Suppose we have the past 60 monthly returns for a stock. A monthly return is represented as a percentage.A 10% monthly return means that if at the beginning of the month its price is 100 and at the end of the month its price is 110, we say its monthly return is 10%.

The question is: what is the probability of seeing this stock's annual return for the next 12 months greater than 10%? How do we solve this problem? The problem obviously includes "forecast" and "probability". Please provide your ideas.

Note: first number is the month eg. -1, -2 and return is -12.11%, 10.84%

Please work it on Excel excel and offer an explanation

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

Discrete Mathematics

Authors: Gary Chartrand, Ping Zhang

1st Edition

1478616261, 9781478616269

More Books

Students also viewed these Mathematics questions

Question

prohit was 5) cos.744 b. 5690 i7e 4. 5128,910 d. 5320,410

Answered: 1 week ago