The Average Annual Return for the S&P 500 from 1886

question 68

Multiple Choice

The average annual return for the S&P 500 from 1886 to 2006 is 15%, with a standard deviation of 25%. Based on these numbers, what is a 95% confidence interval for 2007's returns?

• A) -35%, 65%
• B) -17.5%, 32.5%
• C) -25%, 55%
• D) -20%, 50%

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Definitions:

Absolute Advantage

The capacity of an entity to generate a product or service more effectively than its rivals, utilizing fewer resources.

Coffee

A beverage made by brewing ground, roasted coffee beans, derived from the berries of the Coffea plant.

Salmon

A species of fish commonly found in both fresh and saltwater, highly valued for its taste and nutritional benefits.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors, using fewer resources.