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Consider the following table for the total annual returns for a given period of time. Series Average return Standard Deviation Large-company stocks 11.7 % 20.6

Consider the following table for the total annual returns for a given period of time.

Series

Average return

Standard Deviation
Large-company stocks 11.7 % 20.6 %
Small-company stocks 16.4 33.0
Long-term corporate bonds 6.7 10.0
Long-term government bonds 6.1 9.4
Intermediate-term government bonds 5.6 5.7
U.S. Treasury bills 3.8 3.1
Inflation 3.1 4.2

Requirement 1:

What range of returns would you expect to see 95 percent of the time for long-term corporate bonds?

Requirement 2: What about 99 percent of the time?

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