From jan. 1, 1960 to jan. 1, 1985, the historical average annual rate of return in the hypothetical country of westeros was 12%. the annual standard deviation of the rate of return is 10%. what is the upper bound of the 95.4% confidence interval for the annual rate of return based on this information?

What is the upper bound of the 95.4% confidence interval for the annual rate of return based on this information?

34%

Step-by-step explanation:

1) Previous concepts

A confidence interval is "a range of values that’s likely to include a population value with a certain degree of confidence. It is often expressed a % whereby a population means lies between an upper and lower interval".

The margin of error is the range of values below and above the sample statistic in a confidence interval.

Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".

represent the sample mean for the sample  

population mean (variable of interest)

represent the population standard deviation

2) Confidence interval

The confidence interval for the variable of interest, is given by the following formula:

  (1)

Since the Confidence is 0.954 or 95.4%, the value of and , and we can use excel, a calculator or a table to find the critical value. The excel command would be: "=-NORM.INV(0.023,10,1)".And we see that

Now we have everything in order to replace into formula (1):

So on this case the 99% confidence interval would be given by (-10%;34%) since the lower bound not have practical interpretation we are just interested on the upper bound.

What is the upper bound of the 95.4% confidence interval for the annual rate of return based on this information?

34%

2x^2+5x+17

your welcome. : )