Why a +-3.5% confidence interval in residuals means we could be 7% off in measuring index?
The 99.7% confidence interval of residuals is +-3.5%. Why does this mean that we could be 7% off in predicting the returns of the index?
Wouldn't most errors be within 3.5% of the observed values?
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+-3.5 means 3.5 on left and 3.5 on the write the summation is the two is 7
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