Chartered Financial Analyst Level 1
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An analyst conducts a simple linear regression of a stock's monthly return against a market index's monthly return (both in percentage terms). The following data is gathered:
- Estimated slope: 1.0
- Estimated intercept: 1.2%
- Standard error of the forecast: 1.4%
- Critical t-values at a 5% significance level: ±2.032
Given a forecasted monthly return of 3.5% for the market index, the 95% prediction interval for the stock's monthly return is closest to:
An analyst conducts a simple linear regression of a stock's monthly return against a market index's monthly return (both in percentage terms). The following data is gathered:
- Estimated slope: 1.0
- Estimated intercept: 1.2%
- Standard error of the forecast: 1.4%
- Critical t-values at a 5% significance level: ±2.032
Given a forecasted monthly return of 3.5% for the market index, the 95% prediction interval for the stock's monthly return is closest to:
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