Question: Beta corporation is interested to compute the suitable sample size of securities for the portfolio analysis of a mutual fund with large number of securities.

  1. Beta corporation is interested to compute the suitable sample size of securities for the portfolio analysis of a mutual fund with large number of securities. The mean and variance of the portfolio returns of the mutual fund are known to be 12% and 16%, respectively.

  3.  If there is 95% probability that sampling error to estimate population mean return is 2% or less, how many securities are enough to do the portfolio analysis?


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