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.
