Problem 5-10

The continuously compounded annual return on a stock is normally distributed with a mean of 25% and standard deviation of 30%. With 95.44% confidence, we should expect its actual return in any particular year to be between which pair of values? Hint: Refer Figure 5.3.

rev: 09_14_2016_QC_CS-61156, 09_27_2017_QC_CS-102566, 10_24_2017_QC_CS-106301

35.0% and 85.0%

25.0% and 85.0%

65.0% and 115.0%

5.0% and 55.0%