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Part 1
You observe a portfolio for five years and determine that its
average return is
12.5​%
and the standard deviation of its returns in
19.2​%.
Would a​ 30% loss next year be outside the​ 95%
confidence interval for this​ portfolio?
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Part 1
The low end of the​ 95% prediction interval is
enter your response here​%.
​(Enter your response as a percent rounded to one
decimal​ place.)
A.​Yes, you can be confident that the portfolio will not lose
more than​ 30% of its value next year. This is because the low
end of the prediction interval is less than
−​30%.
B.​Yes, you can be confident that the portfolio will not lose
more than​ 30% of its value next year. This is because the low
end of the prediction interval is greater than
−​30%.
C.​No, you cannot be confident that the portfolio will not lose
more than​ 30% of its value next year. This is because the low
end of the prediction interval is less than
−​30%.
D.​No, you cannot be confident that the portfolio will not lose
more than​ 30% of its value next year. This is because the low
end of the prediction interval is greater than
−​30%.