Assume That the Average Annual Historical Return for Shares That

question 36

Multiple Choice

Assume that the average annual historical return for shares that comprise the Australian All Ordinaries index is 10.5%, and the standard deviation of returns is 18.5%. Based on these numbers what is a 95% prediction interval for 2016 returns?

• A)-10%, 10%
• B)-18.5%, 18.5%
• C)-26.5%, 47.5%
• D)-37%, 37%

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