Calculate Maximum Yield Change Expected For Portfolio Of Trading Assets

Question

The mean change in the value of a portfolio of trading assets has been estimated to be 0 with a standard deviation of 20 percent. Yield changes are assumed to be normally distributed.

1. What is the maximum yield change expected if a 90 percent confidence (one-tailed) limit is used?
    a. 3.30%.
    b. 20.0%.
    c. 33.0%.
    d. 39.2%.
    e. 46.6%.

2. What is the maximum yield change expected if a 95 percent confidence (one-tailed) limit is used?
    a. 3.30%.
    b. 20.0%.
    c. 33.0%.
    d. 39.2%.
    e. 46.6%.

3. What is the maximum yield change expected if a 99 percent confidence (one-tailed) limit is used?
    a. 3.30%.
    b. 20.0%.
    c. 33.0%.
    d. 39.2%.
    e. 46.6%.

Summary

These short questions belong to Finance and it is about calculation of the maximum yield change  expected for a portfolio of trading assets for 90% confidence level, 95% confidence level, and 99% confidence level have been calculated in the solution.

Total Word Count 115