Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term corporate bonds had an average return of 6.9 percent and a standard deviation of 9.9 percent. For the same period, T-bills had an average return of 5.4 percent and a standard deviation of 4.1 percent. Use the NORMDIST function in Excel® to answer the following questions: a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than O percent? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. In one year, the return on long-term corporate bonds was -5.6 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 12.02 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term corporate bonds had an average return of 6.9 percent and a standard deviation of 9.9 percent. For the same period, T-bills had an average return of 5.4 percent and a standard deviation of 4.1 percent. Use the NORMDIST function in Excel® to answer the following questions: a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than O percent? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. c. In one year, the return on long-term corporate bonds was -5.6 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 12.02 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
Related questions
Question
100%
please help
![Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term
corporate bonds had an average return of 6.9 percent and a standard deviation of 9.9 percent. For the same period, T-bills had an
average return of 5.4 percent and a standard deviation of 4.1 percent. Use the NORMDIST function in Excel® to answer the following
questions:
a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than
O percent?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
c. In one year, the return on long-term corporate bonds was -5.6 percent. How likely is it that such a low return will recur at some
point in the future? T-bills had a return of 12.02 percent in this same year. How likely is it that such a high return on T-bills will
recur at some point in the future?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
a. Probability of return greater than 10 percent
Probability of return less than 0 percent
b. Probability of return greater than 10 percent
Probability of return less than 0 percent
c. Probability of return less than -5.6 percent
Probability of return greater than 12.02 percent
%
%
%
%
%
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7da55f8b-0d8c-497b-8f68-1187262f8f75%2F268e971e-f7b2-44a7-b89d-84f2e99fa8d8%2Fn49mci_processed.png&w=3840&q=75)
Transcribed Image Text:Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain time period, long-term
corporate bonds had an average return of 6.9 percent and a standard deviation of 9.9 percent. For the same period, T-bills had an
average return of 5.4 percent and a standard deviation of 4.1 percent. Use the NORMDIST function in Excel® to answer the following
questions:
a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than
O percent?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
c. In one year, the return on long-term corporate bonds was -5.6 percent. How likely is it that such a low return will recur at some
point in the future? T-bills had a return of 12.02 percent in this same year. How likely is it that such a high return on T-bills will
recur at some point in the future?
Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
a. Probability of return greater than 10 percent
Probability of return less than 0 percent
b. Probability of return greater than 10 percent
Probability of return less than 0 percent
c. Probability of return less than -5.6 percent
Probability of return greater than 12.02 percent
%
%
%
%
%
%
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 6 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![A First Course in Probability (10th Edition)](https://www.bartleby.com/isbn_cover_images/9780134753119/9780134753119_smallCoverImage.gif)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
![A First Course in Probability](https://www.bartleby.com/isbn_cover_images/9780321794772/9780321794772_smallCoverImage.gif)
![A First Course in Probability (10th Edition)](https://www.bartleby.com/isbn_cover_images/9780134753119/9780134753119_smallCoverImage.gif)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
![A First Course in Probability](https://www.bartleby.com/isbn_cover_images/9780321794772/9780321794772_smallCoverImage.gif)