Suppose the returns on long-term corporate bonds are normally distributed. The average annual return for long-term corporate bonds from 1926 to 2007 was 6.7 percent and the standard deviation of those bonds for that period was 9.4 percent.

Required: (a) Based on this historical record, what is the approximate probability that your return on these bonds will be less than -3.6 percent in a given year? (Do not round intermediate calculations.)

12.98%, 13.66%, 14.34%, 27.32%, 14.21%

(b) What range of returns would you expect to see 95 percent of the time? (Do not round intermediate calculations.)

-11.49% to 24.23%, -12.7% to 26.78%, -4.% to 22.80%, -21.50% to 34.90%, -12.10% to 25.50%

(c) What range would you expect to see 99 percent of the time? (Do not round intermediate calculations.)

-10.70% to 29.50%, -12.10% to 25.50%, -21.50% to 34.90%, -22.57% to 36.64%, -20.42% to 33.16%

TABLE A.11 Cumulative Areas under the Standard Normal Curve 02. 109. .03 10003 10004 -12 40006 10003 0005 006 2009 10013 .018 0024 0033 2004 20059 - 10009 10012 40017 10023 20032 0043 10057 0075 0099 0129 20166 10212 10268 4078 .06 10003 1.0004 10006 10008 10011 0015 10021 10029 10039 10052 10069 0091 20119 10154 .0197 10250 10314 10392 .0485 10594 10721 1.0869 105 10003 40004 10006 40008 20011 .0016 20022 0030 20040 40054 40071 20094 20122 20158 10202 0256 20322 10401 10495 10606 0735 0885 1056 1251 1469 1711 1977 10002 10003 .0005 .0007 .0010 1.0014 1.0019 .0026 10036 0048 0064 004 20110 .0143 20183 0102 20132 .0170 0217 10274 2034 10427 .0526 0643 .08 0003 004 10005 10007 1010 2014 0020 10027 10037 20049 1006 1087 20113 2016 2018 10239 10301 0375 0465 10571 1064 0838 1003 119 10233 10336 || -15 | 40778 -12 104 2003 40004 10006 0008 20012 40016 40023 0031 10041 20055 0073 20096 20125 .0162 10207 0262 10329 10409 10505 10618 0749 1001 .1075 1271 1.1492 1.1736 .205 12296 2611 12046 3300 3669 .4052 443 1.4840 15160 15557 1.5948 6331 6700 17054 J369 J704 7995 8264 18508 18729 10294 10367 1.0455 10559 10681 .0823 0985 1170 1379 .1611 1867 . 0934 1112 1314 1539 178 12061 12358 12676 13015 3372 3745 .108 418 0516 10630 10764 0918 11093 1292 1515 1762 2033 12327 12643 2981 3336 13707 4090 483 1401 1230 1.1446 1685 1949 .2236 12546 12877 3228 3594 1635 184 2177 (2483 12266 2148 12578 12912 2610 3264 13632 4129 4013 21.00 -3.4 10003 10005 0007 -3.1 20010 -3.0 20013 0019 10026 -27 0035 -2.6 20047 -2.5 0062 -2.4 20082 -2.3 .0107 -2.2 20139 -2.1 20179 -20 10228 10287 0359 1046 1054 0668 -1.4 10808 -13 098 11 151 -1.1 1357 -10 11587 11841 2119 12420 12743 13085 -0.4 3446 -05 3821 4207 4602 15000 5000 5398 5793 16179 16554 6915 7257 750 17881 8159 18413 8643 $49 19032 9192 19332 19452 19554 641 19713 19772 19821 19861 19693 9918 19388 19953 1965 19974 19981 19987 19990 19993 1995 19997 3974 .01 10003 20005 20007 1000 1013 2018 0025 1034 0045 20060 20080 2014 20136 0174 0222 10281 0351 10436 10537 555 10793 10951 1131 1335 1562 .1814 209 2389 12709 13050 3409 3783 4168 4562 490 500 5438 5832 6217 16591 6950 7291 7611 1910 81% 18438 8565 8869 9049 19207 19345 19463 1954 $49 19719 19778 19826 1964 98% 19920 19940 19955 196 975 1982 19987 19991 19993 1995 9997 4660 4522 4920 15080 15478 15871 .6255 16628 5120 .07 40003 10004 40005 .0008 .0011 20015 10021 10028 0038 20051 20068 20089 20116 20150 10192 1024 10307 10384 10475 10582 10708 40853 1020 .1210 1423 11660 .1922 12206 12514 12843 3192 3557 3936 4325 14721 15279 15675 .6064 1.6443 16808 47157 7486 7794 18078 18240 1857 18790 18980 9147 19292 19418 19525 19616 19693 19756 19808 19850 19884 911 1932 19949 19962 19972 19979 19985 19989 19992 1.9995 19996 9997 15517 15910 16293 .6664 7019 6985 4364 4761 15239 15636 16026 6406 16772 7123 7454 7764 18051 18315 18554 18770 18962 14404 1401 15199 15596 15987 6368 6736 7098 7422 7734 8023 8289 48531 8749 18944 19115 9265 19394 19505 9599 17357 7324 7642 7939 18212 18461 18685 18888 106 19222 19357 19474 19573 19656 19726 3156 3520 3897 14286 581 5319 15714 6103 480 684 710 17517 7823 8166 18365 8599 1810 1997 9162 19306 429 19535 925 48925 19131 19099 19251 19382 19495 9591 19671 9738 1.2451 2776 3121 3483 3859 4247 4641 15359 753 1.6141 | 16517 16879 7224 7549 17852 18133 18389 18621 8830 19015 9177 1.9319 19441 19545 19633 19706 19767 19817 19857 19890 19916 19936 19952 19964 19974 19981 19986 19990 19993 19995 19997 19998 19678 9599 9744 7673 797 18238 8485 18708 18907 19082 9236 19370 19484 19582 1964 19732 19788 19834 19871 19901 19925 19943 1995 19968 19977 19983 19988 19991 19994 19996 19997 19783 19793 19798 19830 19868 19898 19922 19941 19956 19838 19875 19904 19927 19945 19959 1959 1942 19878 19906 19929 19946 1980 19970 19279 19406 19515 19608 19686 19750 19803 1986 19881 19909 19931 19948 19961 19971 19979 19985 19989 19992 19994 19996 19997 19761 19912 19854 19887 9913 2934 19951 19963 9973 1980 1985 19990 19993 9995 1998 Cool 1996 976 19977 19978 19982 19987 19991 9994 19995 19997 9994 19988 19992 1994 1996 9997 19984 19989 19992 19994 1996 997