Suppose the returns on bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST function in Microsoft Excel to answer the following questions:
a. What is the probability that in any given year, the return on bonds will be greater than 10 percent? Less than 0 percent?
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?
c. In 1979, the return on bonds was -4.18 percent. How likely is it that a return this low will recur at some point in the future? T-bills had a return of 10.56 percent in this same year. How likely is it that a return on T-bills this high will recur at some point in the future?