Confidence interval for this portfolio

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Reference no: EM132033930

You observe a portfolio for five years and determine that its average return is 12.7% and the standard deviation of its returns in 19.9%. Would a 30% loss next year be outside the 95% confidence interval for this portfolio? The low end of the? 95% prediction interval is ___%.

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. 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%.

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. 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%.

Reference no: EM132033930

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