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The Average Annual Return Over the Period 1886-2006 for Stocks

Question 3

Multiple Choice

The average annual return over the period 1886-2006 for stocks that comprise the S&P 500 is 12%,and the standard deviation of returns is 20%.Based on these numbers,what is a 95% confidence interval for 2007 returns?


A) -28%,52%
B) -10%,40%
C) -20%,35%
D) -15%,35%
E) -5%,25%

Correct Answer:

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