The Average Annual Return Over the Period 1886-2006 for Stocks

question 3

Multiple Choice

The average annual return over the period 1886-2006 for stocks that comprise the S&P 500 is 12%,and the standard deviation of returns is 20%.Based on these numbers,what is a 95% confidence interval for 2007 returns?

• A)-28%,52%
• B)-10%,40%
• C)-20%,35%
• D)-15%,35%
• E)-5%,25%

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