Fight Finance

Courses  Tags  Random  All  Recent  Scores

Scores
keithphw$6,011.61
Jade$1,815.80
Boeti$1,002.09
ZOE HY$860.33
Chu$789.98
royal ne...$750.00
Leehy$713.33
Visitor$650.00
JennyLI$625.61
Visitor$590.00
Visitor$555.33
Visitor$550.00
Visitor$550.00
Visitor$540.00
Visitor$500.00
Yizhou$489.18
Visitor$480.00
Visitor$480.00
Visitor$470.00
Visitor$464.70
 

Question 933  confidence interval, normal distribution

A stock has an expected return of 10% pa and you're 90% sure that over the next year, the return will be between -15% and 35%. The stock's returns are normally distributed. Note that the Z-statistic corresponding to a one-tail:

  • 90% normal probability density function is 1.282.
  • 95% normal probability density function is 1.645.
  • 97.5% normal probability density function is 1.960.

What is the stock’s standard deviation of returns in percentage points per annum (pp pa)?




Copyright © 2014 Keith Woodward