Can somebody explain the answer “Stewart uses small sample of observation (What does it mean ?) of below average interest rates (where does it mention below average rate in question?)” and how should 0.4 to 0.8 times and 1.15 and 1.2 times historical average be interpreted?
Only two years of data.
Right here:
“Global interest rates have ranged from 0.4 to 0.8 times the historical average over the past two years.”
If the historical average were, say, 5%, then 0.4 to 0.8 times the historical average would be 2% – 4%, which is less than 5%.
Exactly as I wrote, above. 0.4 to 0.8 times the average is below average (assuming that the average is positive), and 1.15 to 1.2 times the average is above average (again, assuming that the average is positive).
Darn: That’s early- 2010 text. Then again, I probably had done the same thing last year. FYI, I don’t believe that Concept is testable. Check your books to see if they talk about it.