Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 6.0 percent and a standard deviation
Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 6.0 percent and a standard deviation of 9.9 percent. a. What is the approximate probability that your return on these bonds will be less than -3.9 percent in a given year? Use the NORMDIST function in Excel to answer this question. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What range of returns would you expect to see 95 percent of the time? (A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What range would you expect to see 99 percent of the time? (A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Probablility less than |-3.90% Expected range of returns Expected range of returns
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started