Question
In: Finance
Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a...
Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 5.1 percent and a standard deviation of 8.6 percent.
|
What is the approximate probability that your return on these bonds will be less than −3.5 percent in a given year? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).) |
| Probability | % |
| Requirement 2: | |
|
What range of returns would you expect to see 68 percent of the time? (Do not include the percent signs (%). Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Round your answers to 2 decimal places (e.g., 32.16).) |
| Expected range of returns | % | to | % |
| Requirement 3: | |
|
What range would you expect to see 95 percent of the time? (Do not include the percent signs (%). Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Round your answers to 2 decimal places (e.g., 32.16).) |
Solutions
jeff jeffy answered 5 months agoRelated Solutions
Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Assume for a certain...
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 5% and a standard
deviation of 8.3%. For the same period, T-bills had an average
return of 3.5% and a standard deviation of 2.5%. 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...
Suppose the returns on long-term corporate bonds are normally distributed. The average annual return for long-term...
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.
(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.)
(Click to
select)14.21%12.98%13.66%14.34%27.32%
(b)
What range of returns would...
Given the following information, what is the historical real return for long-term government bonds? Long-term government ...
Given the following information, what is the historical real
return for long-term government bonds?
Long-term government
6.40%
Long-term corporate
6.50%
Inflation rate
3.15%
(A) 9.75%
(B) 3.25%
(C) 3.15%
(D) -3.36%
Consider the following information about two stocks and indicate
which stock has the most systematic risk.
State
Probability
Stock A
Stock B
Recession
0.15
0.11
(0.35)
Norman
0.55
0.18
0.11
Boom
0.30
0.08
0.31
Market risk premium
8.50%
Risk-free rate
3.00%
(A) Both risk are the same...
Given the following information, what is the historical real return for long-term government bonds? Long-term government ...
Given the following information, what is the historical real
return for long-term government bonds?
Long-term government
6.40%
Long-term corporate
6.50%
Inflation rate
3.15%
(A) 9.75%
(B) 3.25%
(C) 3.15%
(D) -3.36%
Consider the following information about two stocks and indicate
which stock has the most systematic risk.
State
Probability
Stock A
Stock B
Recession
0.15
0.11
(0.35)
Norman
0.55
0.18
0.11
Boom
0.30
0.08
0.31
Market risk premium
8.50%
Risk-free rate
3.00%
(A) Both risk are the same...
A. What is the real return on long-term government bonds?
Consider the following information for a period of years:
Arithmetic MeanLong-term government
bonds
6.3 %Long-term corporate
bonds
6.4 %Inflation
3.5%A. What is the real return on long-term government bonds?B. What is the real return on long-term corporate bonds?
Suppose that the returns on an investment are normally distributed with an expected return of 8%...
Suppose that the returns on an investment are normally
distributed with an expected return of 8% and standard deviation of
4%. What is the likelihood of making a negative return? (Hint: the
area under a curve for 1 std dev is 34.13%, 2 std dev is 47.73% and
3 std dev is 49.87%).
A. 47.73%
B. 34.13%
C. 15.87%
D. 2.27%
Historical average returns for Large Company Common Stocks, Long Term Government Bonds, and US Treasury Bills...
Historical average returns for Large Company Common Stocks, Long
Term Government Bonds, and US Treasury Bills for the period 10-year
period of 1999 through 2008 are shown in the following table. Use
these data to solve the next several problems.
Year
Large Common Stock
Long Term Government Bonds
US Treasury Bills
1999
0.2104
-0.0751
0.0480
2000
-0.0910
0.1722
0.0598
2001
-0.1189
0.0551
0.0333
2002
-0.2210
0.1515
0.0161
2003
0.2889
0.0201
0.0094
2004
0.1088
0.0812
0.0114
2005
0.0491
0.0689
0.0279
2006...
Assume that the returns from an asset are normally distributed. The average annual return for this...
Assume that the returns from an asset are normally distributed.
The average annual return for this asset over a specific period was
14.7 percent and the standard deviation of those returns in this
period was 43.59 percent.
a. What is the approximate probability that your money will
double in value in a single year? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
b. What about triple in value? (Do...
Assume that the returns from an asset are normally distributed. The average annual return for this...
Assume that the returns from an asset are normally distributed.
The average annual return for this asset over a specific period was
17.2 percent and the standard deviation of those returns in this
period was 43.53 percent.
a.
What is the approximate probability that your money will double
in value in a single year? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
b.
What about triple in value? (Do...
Suppose you are given the following end of year returns for Large stocks, Long-term Bonds, Treasury...
Suppose you are given the following end of year returns for
Large stocks, Long-term Bonds, Treasury Bills, and Inflation.
Calculate the correlation between T-bills and Inflation. (Round to
4 decimals). Year Large Stocks Long-term Bonds T-bills Inflation
1977 -7.16% 2.31% 5.45% 6.70% 1978 6.57% -2.07% 7.64% 9.02% 1979
18.61% -2.76% 10.56% 13.29% 1980 32.50% -5.91% 12.10% 12.52% 1981
-4.92% -16.00% 14.60% 8.92% 1982 21.55% 49.99% 10.94% 3.83% 1983
22.56% -2.11% 8.99% 3.79% 1984 6.27% 16.53% 9.90% 3.95%
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Dolomite, [CaMg(CO3)2] is found in a soil sample. A geochemist titrates 24.65 g of soil with...
- 4) Cost per equivalent unit of direct materials and conversion (4 marks) The cost per equivalent...
- We usually write numbers in decimal form (or base 10), meaning numbers are composed using 10...
- Consider a saturated solution of the salt MX3, which M is a metal cation with a...
- Energyshot is a new energy drink that is about to be introduced into the global market....
- Problem 1: During the month, EKM Enterprise purchased $100,000 in raw material on account, used $150,000...
- An electron is accelerated inside a parallel plate capacitor. The electron leaves the negative plate with...
ADVERTISEMENT