Suppose that random samples of 50 returns for each of the following investment classes give the indicated sample mean and sample standard deviation:
Fixed annuities: = 7.83%, s = .51%
Domestic large cap stocks: = 13.42%, s = 15.17%
Domestic midcap stocks: = 15.03%, s = 18.44%
Domestic small cap stocks: = 22.51%, s - 21.75%
a. For each investment class, compute a 95 percent confidence interval for the population mean return.
b. Do these intervals suggest that the current mean return for each investment class differs from the historical (1970 to 1994) mean return given in Table 3.11 (page 143)? Explain.