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1) A stock had returns of 15 percent, 16 percent, and 5 percent for the past 3 y

ID: 2633270 • Letter: 1

Question

1) A stock had returns of 15 percent, 16 percent, and 5 percent for the past 3 years. Based on these returns, what is the probability that this stock will earn at least 18.08 percent in any one given year?

0.5 percent

5.0 percent

16.0 percent

2.5 percent

1.0 percent

2)

A stock has returns of 7 percent, 11 percent, ?23 percent, and 18 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?

A stock has returns of 7 percent, 11 percent, ?23 percent, and 18 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?

?14.8 to 21.3 percent ?32.9 to 21.3 percent ?69.1 to 75.6 percent ?32.9 to 39.4 percent ?16.5 to 19.7 percent

Explanation / Answer

1) A stock had returns of 15 percent, 16 percent, and 5 percent for the past 3 years. Based on these returns, what is the probability that this stock will earn at least 18.08 percent in any one given year?

0.5 percent

5.0 percent

16.0 percent

2.5 percent

1.0 percent

2)

A stock has returns of 7 percent, 11 percent, ?23 percent, and 18 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?

A stock has returns of 7 percent, 11 percent, ?23 percent, and 18 percent for the past 4 years. Based on this information, what is the 95 percent probability range for any one given year?

?14.8 to 21.3 percent ?32.9 to 21.3 percent ?69.1 to 75.6 percent ?32.9 to 39.4 percent ?16.5 to 19.7 percent