Explore BrainMass

Explore BrainMass

    Standard Deviation and Investment

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please solve with the following problem. Provide step by step calculations with explanations.

    John is investing in the S&P 500. His expected return on the S&P 500 is 10% with a standard deviation of 4%. If John is investing $200,000, then what is the dollar range of returns that John can have with 90 percent confidence at the end of the year?

    © BrainMass Inc. brainmass.com June 4, 2020, 2:33 am ad1c9bdddf
    https://brainmass.com/statistics/quantative-analysis-of-data/standard-deviation-investment-466106

    Solution Preview

    Problem: John is investing in the S&P 500. His expected return on the S&P 500 is 10% with a standard deviation of 4%. If John is investing $200,000, then what is the dollar range of returns that John can have with 90 percent confidence at the end of the year?

    Solution:
    We assume that the stock return ...

    Solution Summary

    This solution helps with a problem involving standard deviation and investment. It helps find the dollar range of returns a person who is investing in a stock recieves at the 90 percent confidence interval at the end of the year, given standard deviation and expected return. Step by step calculations are given along with explanations of each step. The explanation is given in 226 words.

    $2.19

    ADVERTISEMENT