Q2. Based on 3600 days of data, you estimated a daily mean log return around 4.0...

Q2. Based on 3600 days of data, you estimated a daily mean log return around 4.0 bps and a daily standard deviation of about 150 bps for NASDAQ index.

Q2a. What is the standard error for your mean estimate?

Q2b. At 95% confidence, can your reject that the true mean at daily level is zero or lower?

Q2c. What is the probability of losing money in ONE year?

Q2d. What is the probability of TRIPLING your money in FOUR years?

Expert Solution

Rahul Sunny answered 2 years ago

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You collected 10 years of daily data. Based on that you find first trading day of...

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calculate the mean daily return, Variance and standard deviation for each stock?

BAFB-0.01209-0.009810.002052-0.00471-0.0050.0151010.0039630.0063530.0034920.0008790.003253-0.00160.005702-0.001440.0054430.000160.000752-0.000160.01172-0.007850.002525-0.00484-0.002070.0086780.002078-0.0037-0.00415-0.002820.0040910.004775-0.00630.001772-0.00634-0.00716-0.002330.00332-0.005640.0086370.0050670.012644-0.01573-0.00553-0.01040.0022250.0034760.0003960.00970.0026950.0139520.025452-0.002630.0101750.00196-0.00595-0.03288-0.024330.0123710.01251-0.01045-0.0115-0.008470.0044020.0007830.004539-0.008370.005610.006156-0.003250.002432-7.8E-050.0216760.0101060.0100340.001077-0.00068-0.0163-0.00918-0.005080.0057440.010840.006930.004196-0.00908-0.008820.0054190.0014050.0048580.003898-0.00098-0.00450.0182230.002184-0.001780.002102-0.004240.0019420.0148670.009691-0.01546-0.01044-0.004340.0013190.001652-0.009530.00090.0004690.003745-0.002660.0082090.0080760.0079940.011978-0.0025-0.00085-0.001550.0159230.0134190.0091620.011422-0.007430.0469-0.00945-0.01532-0.0103-0.002090.012337-0.00406-0.00228calculate the mean daily return, Variance and standard deviation for each stock?

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Q2. Based on 3600 days of data, you estimated a daily mean log return around 4.0...

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