You observe a portfolio for five years and determine that its average return is 11.5% and the standard deviation of its returns in 19.5%. 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 hte low end of the prediction interval is greater than -30%
B) No, you cannot be confident that the portfolio will not lsoe more than 30% of its value next year. This is because the low end of the prediction interval is less than -30%.
C) Yes, you can be confident that the portfolio will not lose more than 30% of its value next year.This is because hte low end of the prediction interval is greater 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%