You observe a portfolio for five year and determine that its average return is 12.0?% and the standard deviation of its returns in 20.0?%. Would a? 30% loss next year be outside the? 95% confidence interval for this? portfolio?
The low end of the? 95% prediction interval is ( ) %.
A. No, you cannot be confident that the portfolio will not lose more than? 30% of its value next year. This is because the low end of the prediction interval is greater than −?30%.
B. Yes, you can be confident that the portfolio will not lose more than? 30% of its value next year. This is because the low end of the prediction interval is greater than −?30%.
C. No, you cannot be confident that the portfolio will not lose more than? 30% of its value next year. This is because the low end of the prediction interval is less than −?30%.
D. Yes, you can be confident that the portfolio will not lose more than? 30% of its value next year. This is because the low end of the prediction interval is less than −?30%.