Computation of next year stock return

Reference no: EM1356912

Use the following historical data over the 1926-2000 period to answer the following question.

Asset Average Return Standard Deviation
Large-company stocks 13.0% 20.2%
Small-company stocks 17.3% 33.4%
Long term government bonds 5.7% 9.4%
Us Treasury Bills 3.9% 3.2%

If the returns on large company stocks are normally distributed, for which of the following returns can you not state, with 95% confidence that next years stock return might be equal to? Show your work.

a. -30.4%
b. -25.6%
c. 20.3%
d. 33.5%
e. 52.0%

Reference no: EM1356912

Questions Cloud

Determine total factory overhead costs : At a volume of 20,000 direct labor hours, Tirso Company incurs 50,000 in factory overhead costs, including 10,000 in fixed costs. suppose that this activity is within the relevant range,

Fixed asset depreciation-cisco and funseth farms examples : Funseth Farms, purchased a tractor in 2008 at a cost of $30,000. The tractor was sold for $3,000 in 2011. Depreciation recorded through the disposal date totaled $26,000.

Simple organizational structure : additional feature of this type of organizational structure would be the flat structure that limits upward mobility.

Responsibility and hierarchical relationships : Explain the executive, managerial, and administrative organization of a firm and indicates responsibility and hierarchical relationships.

Computation of next year stock return : If the returns on large corporation stocks are normally distributed, for which of the following returns can you not state, with 95 percent confidence that next years stock return might be equal to?

Describe about reward structure : Reward structure - why it is possible for highly ethical leaders to preside over an organization that commits several unethical acts.

Journal entry for bad debt expense : Prepare the adjusting entry that records bad debts expense. Prepare the journal entry that records a write-off of a $700 uncollectible account receivable.

Recording journal entry-wage accrual and reversal : August 31 falls on a Thursday. On Friday, September 1, the part-time employee John J. Jones was paid $250 or $50 per day for a five-day work week which ended that Friday.

Types of organizations use a multidivisional structure : Multidivisional Structure-What types of organizations use a multidivisional structure and why do they select the multidivisional structure over for instance, a functional structure

User Account

All Pages