• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

CM2 Assignment X2.6.iv

S

snerap@gmail.com

Member
Hello All:
My apologies if this question has already been asked and answered - I couldn't understand the solution to this question.

Why are we using a 99.5% value from the tables, the question asks for 99% confidence interval?

In the solution the value used is 2.5758.

Any reasonable explanation to this would be super helpful!

Thanks in advance!!

Regards,
Sneha
 
Hi
The required interval here is the range of share prices that could occur with 99% confidence - this excludes the 1% of extreme outcomes. But those extreme outcomes could occur at either end of the distribution. So we need to exclude the 0.5% tails at both end, which is achieved by using the 99.5% value from the Tables.
Hope that helps.
 
You must log in or register to reply here.
Back
Top