Long-term government bonds are normally distributed

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Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 6.7 percent and a standard deviation of 10 percent.

Requirement 1: What is the probability that your return on these bonds will be less than −13.3 percent in a given year? Use the NORMDIST function in Excel to answer this question. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (eg., 32.16).) Probability %

Requirement 2: What range of returns would you expect to see 68 percent of the time? (Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations. Enter your answers as a percentage rounded 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? (Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Expected range of returns % to %

Reference no: EM13921267

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