*** *** the return of *** *** *** often *** as *** *** of *** risk of the *** *** portfolio manager *** *** invest in *** security if *** population standard deviation of return *** *** 10% *** month. *** *** *** 18 monthly returns on *** particular security yielded *** sample *** *** per month. Construct *** 90% condence *** estimate *** the population variance.
Solution
Given that the sample size *** 18, *** standard deviation *** *** *** wish *** *** a90%
condence interval *** *** *** *** 1 *** *** condence level (1)
Condence level *** *** *** 0 *** *** Thus, *** *** of *** *** = *** *** *** *** *** *** *** sample *** *** *** and sample *** *** *** 14 *** *** *** Specify *** formula
100(1 *** condence interval *** of population *** *** *** 1)s2
2
( *** 2;n 1) ;
(
n 1)s2 *** = 2;n *** *** = *** *** *** *** *** 1)are the *** values from *** *** of signicance and
n
*** *** *** 4 Determine the *** *** critical *** of *** of signicance *** of freedom are2
( *** *** 1)= 2
(0 *** *** :587 and 2
(1 = 2;n *** *** :95 ;17) *** *** .
Step *** Determine *** condence interval
90 % *** interval *** for population variance *** 1)s2 *** = 2;n *** *** (
n *** ***
2
(1 = *** *** *** :64 27
:587
2
17
201 *** 8
:672
124 :2571 2
*** *** :
Thus 90% condence *** *** population *** *** *** :2571 *** :2814) ***