Numbers File Edit Insert Table 125% ▼ Organize Format Arrange View Share Window Help H + Assignmen #2_Data 7 A M Vie Vie View Zoom Add Category Pivot Table Insert Table Chart Text Shape Media Comment + + + DAILY RETURN WHEAT PRICES ACTIVE VS FAILED RETAIL COMPANY CREDIT_SCORE Daily_Return (%) 000 2.89 1.11 3.31 5.76 0.84 0.84 5.92 3.65 0.19 3.02 0.20 0.20 2.18 -3.86 -3.33 -0.07 -1.34 2.38 -1.04 -2.45 73 280 OCT 15 O O
Stock Return Performance Analysis:
An investment firm monitors the daily returns of a particular stock in the S&P 500. The daily return is defined as the percentage change in the stock's price from the previous day. The firm recorded the stock's daily returns at random times during the last quarter of the year. Assume that the standard deviation of the population of daily returns is known to be σ = 2.8%.
The data for daily return for the particular stock in the S&P 500 is given in Excel under “DAILY RETURN” sheet.
a) Based on a 95% confidence level, what is the margin of error for the mean estimate of the daily return?
b) Given the margin of error computed in part (b), provide a 95% confidence interval for μ, the mean daily return for this stock. The stock’s long-term average daily return is stated as 1.5%. Are the results of this analysis consistent with the stock’s long-term performance?
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