Suppose the returns on long-term corporate bonds are normally distributed. Suppose the historical average annual return for the long-term corporate bond was 6.0 percent and the standard deviation was 18.5 percent.

a) What is the approximate probability that your return on these bonds will be less than 8.9 percent in a given year? Use the NORMDIST function in Excel(R) to answer this question. (Do not round intermediate calculations and round your final answer to 2 decimal places; e.g., 32.16)

b) What range of returns would you expect to see 95 percent of the time? (Enter your answers for the range from lowest to highest. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places; e.g., 32.16)

A. a) Probability: 21.03% b) 95% level: -31.00% to 43.00%

B. a) Probability: -0.805 b) 95% level: -12.50% to 18.50%

C. a) Probability: 21.03% b) 95% level: -49.50% to 61.50%

D. a) Probability: -0.805 b) 95% level: -31.50% to 61.50%