Calculate the 95% prediction intervals for the four different investments includ

Question

Calculate the 95% prediction intervals for the four different investments included in the following table Small Stocks 19.76% 38.22% S&P; 500 12.44% 19.53% Corporate Bonds 5.13% 7.13% T-Bills 3.79% 4.14% Average Return Standard Deviation of returns The 95% prediction interval of small stocks is between % and %. Round to two decimal places and put the lower number first.) The 95% prediction interval of the S&P500; is between % and %. Round to two decimal places and put the lower number t The 95% prediction interval o corporate bonds is between % and %. Round to two decimal places and put the lower number first The 95% prediction interval of T bills is between % and % Round to two decimal places and put the lower number first. .)

Explanation / Answer

Lower point of 95% predicition interval is mean-standard deviaition*1.96

Lower point of 95% predicition interval is mean+standard deviaition*1.96

Range is mean-standard deviaition*1.96 to mean+standard deviaition*1.96

Small stocks: Range is 19.76%-1.96*38.22%=-55.151% to 19.76%+1.96*38.22%=94.6712%

S&P500: Range is 12.44%-1.96*19.53%=-25.839% to 12.44%+1.96*19.53%=50.7188%

Corporate Bonds: Range is 5.13%-1.96*7.13%=-8.845% to 5.13%+1.96*7.13%=19.1048%

T-Bills: Range is 3.79%-1.96*4.14%=-4.324% to 3.79%+1.96*4.14%=11.9044%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.