Question

Calculate the 95% prediction intervals for the four different investments included in the following table. Small Stocks S&P 500 Corporate Bonds T-Bills Average Return 18.11% 11.73% 5.12% 3.76% Standard Deviation of returns 38.22% 19.88% 7.21% 3.34% The 95% prediction interval of small stocks is between ______% and _____%.

Answer #1

The 95% prediction interval of small stocks calculated as follows:

Formula to compute the range of returns at a 95% confidence level is

**95% prediction interval range = Average ± (Z* X Standard
deviation)**

Given,

Average return fot small stocks = 18.11%

Standard deviation fot small stocks = 38.22%

A 95% prediction interval multiplier (Z*) = 1.96

Therefore,

**95% prediction interval range
= Average ± (Z* X Standard deviation)**

95% prediction interval range = 18.11% ± ( 1.96 x 38.22%)

= 18.11% ± 74.91%

= (–56.80% , 93.02%)

95% prediction interval range of small stocks is
**(–56.80% , 93.02%)**

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upvote**

Calculate the 95% prediction intervals for the four different
investments included in the following table.
Small Stocks
S&P 500
Corporate Bonds
T-Bills
Average Return
18.12%
11.39%
6.28%
4.85%
Standard Deviation of returns
39.31%
20.96%
7.02%
3.75%
The 95% prediction interval of small stocks is between % and %.
(Round to two decimal places and put the lower number first.)
The 95% prediction interval of the S&P500 is between % and
%. (Round to two decimal places and put the lower...

1: using the following data, please calculate the 95% prediction
intervals for the four different investments.
If you want to be 95% certain that you don’t lose more than 8%
on your investment, which investments should you choose?
Average Annual
Return
Standard Deviation of Returns
Small
stocks
18.37%
38.79%
S&P
500
11.84%
20.01%
Corporate
Bond
6.47%
6.98%
Treasury Bill
3.46%
3.14%
EXPERTS ONLY PLEASE WITH EXPLANATIONS

Small Stocks
S&P 500
Corporate Bonds
T-Bills
Average Return
19.73%
12.31%
6.36%
3.98%
Standard Deviation of returns
38.67%
19.52%
6.75%
4.88%
1. Calculate the 95% prediction intervals for the four different
investments included in the following table.
The 95% prediction interval of small stocks is between __% and
__%. (Round to two decimal places and put the lower number
first.)
The 95% prediction interval of the S&P500 is between __% and
__%. (Round to two decimal places and put the...

If returns of S&P 500 stocks are normally distributed,
what range of returns would you expect to see 95% of the time?
Base your answer on the information below.
Small Stocks, S&P 500, Corporate Bonds, T-Bills, (Average
Return): 18.52%, 11.61%, 6.02%, 4.77% (Standard Deviation of
returns): 38.52%, 20.49%, 7.28%, 3.74%
The 95% prediction interval of the S&P500 is between ___%
and ___%. (Round to two decimal places and put the lower number
first.)

Use the following table:
Series
Average return
Large stocks
12.04
%
Small stocks
16.74
Long-term corporate bonds
6.37
Long-term government bonds
6.10
U.S. Treasury bills
3.97
Inflation
3.10
a. Determine the return on a portfolio that was
equally invested in large-company stocks and long-term corporate
bonds. (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Portfolio Return
%
b. What was the return on a portfolio that was
equally invested...

Use the following table: Series Average return Large stocks
11.96 % Small stocks 16.66 Long-term corporate bonds 6.33 Long-term
government bonds 6.10 U.S. Treasury bills 3.93 Inflation 3.10
a. Determine the return on a portfolio that was equally invested
in large-company stocks and long-term corporate bonds. (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
b. What was the return on a portfolio that was equally invested
in small stocks...

Problem 10-18 Return Distributions [LO 3]
Consider the following table for different assets for 1926
through 2011.
Series
Average return
Standard Deviation
Large-company stocks
11.8
%
20.3
%
Small-company stocks
16.5
32.5
Long-term corporate bonds
6.4
8.4
Long-term government bonds
6.1
9.8
Intermediate-term government bonds
5.5
5.7
U.S. Treasury bills
3.6
3.1
Inflation
3.1
4.2
Requirement 1:
What range of returns would you expect to see 68 percent of the
time for large-company stocks? (Negative amount should be
indicated by...

Consider the following table for the total annual returns for a
given period of time. Series Average return Standard Deviation
Large-company stocks 11.7 % 20.6 % Small-company stocks 16.4 33.0
Long-term corporate bonds 5.1 8.4 Long-term government bonds 6.1
9.4 Intermediate-term government bonds 5.6 5.7 U.S. Treasury bills
3.8 3.1 Inflation 3.1 4.2 What range of returns would you expect to
see 95 percent of the time for long-term corporate bonds? (A
negative answer should be indicated by a minus...

1. Below are the historical arithmetic average returns and
standard deviations for different asset classes.
Asset class
Mean return
Standard deviation
T-bills
0.035
0.031
Corporate bonds
0.063
0.084
Small company stocks
0.169
0.323
Large company stocks
0.121
0.202
Assume that the returns are normally distributed. Use Excel's
NORM.DIST() function to answer the following questions.
a. What is the probability that the return on corporate bonds
will be less than 4%?
b. What is the probability that the return on small...

Consider the following
table for the total annual returns for a given period of
time.
Series
Average return
Standard Deviation
Large-company
stocks
10.8
%
21.1
%
Small-company
stocks
16.4
33.0
Long-term corporate
bonds
6.2
8.4
Long-term government
bonds
6.1
9.4
Intermediate-term
government bonds
5.6
5.7
U.S. Treasury
bills
3.8
3.1
Inflation
3.1
4.2
Requirement
1:
What range of returns would you expect to see 95 percent of the
time for large-company stocks? (Negative amount should be
indicated by a minus...

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