Question

Consider the following realized annual returns: Year End Market Realized Return Microsoft Realized Return 1996 21.2% 88.3% 1997 30.3% 56.4% 1998 22.3% 114.6% 1999 25.3% 68.4% 2000 -11.0% -62.8% 2001 -11.3% 52.7% 2002 -20.8% -22.0% 2003 33.1% 6.9% 2004 13.0% 9.2% 2005 7.3% -0.9% Suppose that you want to use the 10 year historical average return on Microsoft to forecast the expected future return on Microsoft. Required:

1#: Calculate the 95% confidence interval for your estimate of the expected return.

(PLEASE provide formulas, Step-by-step process for all sections/parts, **don't use spreadsheet, I need to see the complete work out for all parts**)

Answer 1

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