Use the Table for the Question(s)below

question 96

Essay

Use the table for the question(s)below.
Consider the following realized annual returns:
-Suppose that you want to use the 10 year historical average return on Stock B to forecast the expected future return on Stock B.Calculate the 95% confidence interval for your estimate of the expect return.

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Definitions:

Abnormal Return

The difference between an investment's actual return and its expected return based on the market or a benchmark's performance.

Economic Return

The total financial gain or loss on an investment or business venture, considering both cash flows and changes in market value.

Market Movements

Fluctuations in the prices of securities within financial markets, influenced by various factors including economic indicators, market sentiment, and political events.

P/E Ratios

The price-to-earnings ratio, a valuation metric comparing the current share price of a company to its per-share earnings.