finance data bank
Use the table for the question(s) below.
Consider the following realized annual returns:
Year End 
Index Realized Return 
Stock A Realized Return 
2000 
23.6% 
46.3% 
2001 
24.7% 
26.7% 
2002 
30.5% 
86.9% 
2003 
9.0% 
23.1% 
2004 
2.0% 
0.2% 
2005 
17.3% 
3.2% 
2006 
24.3% 
27.0% 
2007 
32.2% 
27.9% 
2008 
4.4% 
5.1% 
2009 
7.4% 
11.3% 
10) The average annual return on the Index from 2000 to 2009 is closest to:
A) 7.10%
B) 4.00%
C) 9.75%
D) 8.75%
12) The variance of the returns on the Index from 2000 to 2009 is closest to:
A) .0450
B) .3400
C) .1935
D) .0375
13) The variance of the returns on Stock A from 2000 to 2009 is closest to:
A) .3145
B) .0990
C) .1100
D) .9890
14) The standard deviation of the returns on the Index from 2000 to 2009 is closest to:
A) 19.5%
B) 20.5%
C) 3.8%
D) 8.8%
15) The standard deviation of the returns on Stock A from 2000 to 2009 is closest to:
A) 33.2%
B) 16.4%
C) 31.5%
D) 11.0%
16) Suppose that you want to use the 10 year historical average return on the Index to forecast the expected future return on the Index. The standard error of your estimate of the expect return is closest to:
A) 19.4%
B) 3.8%
C) 8.8%
D) 1.95%
17) Suppose that you want to use the 10 year historical average return on Stock A to forecast the expected future return on Stock A. The standard error of your estimate of the expect return is closest to:
A) 16.4%
B) 3.32%
C) 3.15%
D) 33.20%
18) Suppose that you want to use the 10 year historical average return on the Index to forecast the expected future return on the Index. The 95% confidence interval for your estimate of the expect return is closest to:
A) 10.6% to 28.2%
B) 6.8% to 10.7%
C) 37.0% to 47.6%
D) 4.9% to 12.7%
19) Suppose that you want to use the 10 year historical average return on Stock A to forecast the expected future return on Stock A. The 95% confidence interval for your estimate of the expect return is closest to:
A) 13.2% to 19.5%
B) 10.1% to 22.7%
C) 6.5% to 26.3%
D) 15.1% to 47.8%
20) The geometric average annual return on the Index from 2000 to 2009 is closest to:
A) 9.75%
B) 8.75%
C) 7.10%
D) 8.35%
21) The geometric average annual return on Stock A from 2000 to 2009 is closest to:
A) 12.4%
B) 16.7%
C) 13.2%
D) 17.8%

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