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Consider the following table for the total annual returns for a given period of time Large-company stocks : Average return 12.4% Standard deviation 20.7% Small-company

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

Large-company stocks : Average return 12.4% Standard deviation 20.7%

Small-company stocks: Average return 16.4% Standard deviation: 33.0%

Long-term corporate bonds: Average return 6.2% Standard deviation 8.4%

Long-Term government bonds: Average return 6.1% Standard deviation: 9.4%

Intermediate-term government bonds: Average return 5.6% Standard deviation: 5.7%

U.S. Treasury bills: Average return 3.8% Standard deviation 3.1%

Inflation: Average return 3.1% Standard deviation 4.2%

Requirement 1: What range of returns would you expect to see 95% of the time for large-company stocks?

Requirement 2: What about 99% of the time?

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