2 Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST function in Excel to answer the following questions: a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than 0 percent? b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent? c. In 1980, the return on long-term government bonds was -3.95 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 11.24 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? 3 4 Input area: 5 6 Long-term corporate bonds 7 Average return 8 Standard deviation 9 T-bills 10 11 Average return Standard deviation 12 a. Return greater than 13 Return less than 14 b. Return greater than 6.40% 8.50% 3.40% 3.10% 10.00% 0.00% 10.00%