Aimee is the owner of a stock with annual returns of 17.6 percent, −11.7 percent, 5.6 percent, and 9.7 percent for the past four years. She thinks the stock may achieve a return of 17 percent again this coming year. What is the probability that your friend is correct?
A) Less than .5 percent
B) Greater than .5 percent but less than 1 percent
C) Greater than 1 percent but less than 2.5 percent
D) Greater than 2.5 percent but less than 16 percent
E) Greater than 16 percent

Question

Quizplus · Accepted Answer

There is no statistical basis to determine the probability of achieving a specific return like 17% based on past returns alone. The probability is subjective and could be considered greater than 16% if Aimee has additional information or confidence in her prediction.

Aimee Is the Owner of a Stock with Annual Returns