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Question
Consider the following realized annual returns:| Year End | Index Realized Return | Stock A Realized Return |
| 2000 | 23.6% | 46.3% |
| 2001 | 24.7% | 26.7% |
| 2002 | 30.5% | 86.9% |
| 2003 | 9.0% | 23.1% |
| 2004 | -2.0% | 0.2% |
| 2005 | -17.3% | -3.2% |
| 2006 | -24.3% | -27.0% |
| 2007 | 32.2% | 27.9% |
| 2008 | 4.4% | -5.1% |
| 2009 | 7.4% | -11.3% |
Suppose that you want to use the 10 year historical average return on Stock A to forecast the expected future return on Stock A. The 95% confidence interval for your estimate of the expect return is closest to:
A) 13.2% to 19.5%
B) -4.5% to 37.4%
C) 6.5% to 26.3%
D) -15.0% to 47.9%
Answer
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