If the TSX's historical average return and standard deviation are 13% and 17%, respectively, what isthe expected return next year using a 95% confidence interval?
A) -21% to 47%
B) -38% to 64%
C) 13% to 17%
D) -4% to 30%

Question

Quizplus · Accepted Answer

The 95% confidence interval is calculated as the historical average return plus or minus 1.96 times the standard deviation. Therefore, it is 13% ± (1.96 * 17%), which results in a range of approximately -21% to 47%.

If the TSX's Historical Average Return and Standard Deviation Are