An investor with a substantial stock portfolio sued her broker and brokerage firm because lack of diversification in her portfolio led to poor performance The rates of return for the 39 months that the account was managed by the broker produced these summary statistics 1 10 , S 5 99 Consider the 39...

Large sample 95 confidence interval for mean mo ...

An investor with a substantial stock portfolio sued her broker and brokerage firm because lack of diversification

Question:

An investor with a substantial stock sued her and brokerage firm because lack of diversification in her led to poor performance. The rates of return for the 39 months that the account was managed by the produced these summary statistics: = -1.10%, S = 5.99%. Consider the 39 monthly returns as a random sample from the population of returns the brokerage would generate if it managed the account forever. Using the sample results, construct a 95% confidence interval for the mean monthly market return. Let the S&P 500 represent the market, and suppose the mean S&P 500 return for the same period is 0.94%. Is this a realistic value for the population mean of the client's account? Explain.
Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...