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NEW QUESTION: 3
A portfolio with 10 stocks has a weighted average return of 5.5% and a variance of 25. What is the
8 5% confidence interval for the weighted average?
A. [-1.7%, 12.7%]
B. [-30.5%, 41.5%]
C. [-35.625%, 46.625%]
Answer: A
Explanation:
The variance is 25, which corresponds to a standard deviation of 5%. The 85% confidence interval is given by: X-bar +- 1.44s = 5.5 +- 1.44 x 5.
2
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