Suppose the average return on FTSE TMX Canada long-term bonds is 6.90% and the standard deviation...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose the average return on FTSE TMX Canada long-term bonds is 6.90% and the standard deviation is 8.10% and the average return and standard deviation on T-bills are 4.00% and 3.50%, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel to answer the following questions. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10%? Less than 0%? Greater than 10% Less than 0% % % b. What is the probability that in any given year, the return on T-bills will be greater than 10%? Less than 0%? Greater than 10% Less than 0% % % c-1. In 1981, the return on FTSE TMX Canada long-term bonds was -4.36%. How likely is it that such a low return will recur at some point in the future? Probability % c-2. T-bills had a return of 10.70% in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? Probability % Prev Suppose the average return on FTSE TMX Canada long-term bonds is 6.90% and the standard deviation is 8.10% and the average return and standard deviation on T-bills are 4.00% and 3.50%, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel to answer the following questions. (Do not round intermediate calculations. Round the final answers to 2 decimal places.) a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10%? Less than 0%? Greater than 10% Less than 0% % % b. What is the probability that in any given year, the return on T-bills will be greater than 10%? Less than 0%? Greater than 10% Less than 0% % % c-1. In 1981, the return on FTSE TMX Canada long-term bonds was -4.36%. How likely is it that such a low return will recur at some point in the future? Probability % c-2. T-bills had a return of 10.70% in this same year. How likely is it that such a high return on T-bills will recur at some point in the future? Probability % Prev
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Write a program that displays the color study shown at right, which gives Albers squares corresponding to each of the 256 levels of blue (blue-to-white in row major order) and gray (black-to-white in...
-
Using CAPM A stock has an expected return of 15 percent, its beta is 1.45, and the expected return on the market is 12 percent. What must the risk-free rate be?
-
What is the EOQ formula with gradual replenishment?
-
For the same stated rate, daily compounding is best. You would earn more "interest on interest."
-
Shao Airlines is considering two alternative planes. Plane A has an expected life of 5 years, will cost $100 million, and will produce net cash flows of $30 million per year. Plane B has a life of 10...
-
( I need a spread sheet version of the answers ) You have been asked to prepare a December cash budget for Ashton Company, a distributor of exercise equipment. The following information is available...
-
You are on the Sports Day planning group and have been allocated the role as parent liaison. This involves providing parents with all information they need to know about the sports day and providing...
-
While analysing the bids for selecting a suitable pump, what are the factors to be considered to evaluate the hydraulic performance of the pumps offered in the various bids
-
What is the purpose of a compliance audit?
-
a. What is an audit committee, what is its ideal composition, and why has there been a marked increase in their use? b. What are the functions of audit committees?
-
Differentiate between financial and operational auditing.
-
How do government auditing standards differ from generally accepted auditing standards?
-
How may the typical approach the auditor should take toward management's assertions be characterized? Explain.
-
You are an assistant to Blake Harper, a partner in Parma Disaster Recovery in Atlanta, Georgia. The firm offers training and consulting services to companies that want to prepare for or recover from...
-
The polar coordinates of a point are given. Find the rectangular coordinates of the point. (-1, - /3)
-
What are the two types of auditors? Briefly define them.
-
How does Philip Wallages view of the audit process compare the empirical scientific cycle to the financial audit process?
-
What are the five components of internal control? Give a sentence on each.
Study smarter with the SolutionInn App