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Basic Question 2 of 18
An investor estimated the mean return of a portfolio at 12% and the standard deviation at 16%. What is the 95% confidence interval for the mean return on this portfolio?
B. [-14.32%, 18.32%]
C. [-5.42%, 18.58%]
A. [-19.36%, 43.36%]
B. [-14.32%, 18.32%]
C. [-5.42%, 18.58%]
User Contributed Comments 6
| User | Comment |
|---|---|
| kamin | return 12+-1.96*16 |
| pisanc06 | Dont forget to put the order of operations in the equation! 12 + or - the product of(1.96*16) |
| bidisha | I dont get this q |
| davcer | bidisha, with 95% of confidence you get a Z of 1.96, so your range is mean+/- std dv(Z) |
| lordcomas | Where do you get the -19.36% from? I totally get the 43.36% but not the other result, can someone please explain? thanks. |
| jimmyvo | 12 + 1.96 * 16; and 12 - 1.96 * 16 Do multiplication first. Order of operations applies. |
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Learning Outcome Statements
explain how to standardize a random variable;
calculate and interpret probabilities using the standard normal distribution;
CFA® 2024 Level I Curriculum, Volume 1, Module 4.