# Question

The following table summarizes the average annual return and the standard deviation of returns for several types of securities over the past 75 years.

Assume annual returns in each case are approximately normally distributed around the mean rate. Using this historical information as the basis for your calculations, what is the probability of loss over the next year if you put all your money into

a. Small-cap stocks?

b. Large-cap stocks?

c. Long-term bonds?

d. Treasury bills?

Assume annual returns in each case are approximately normally distributed around the mean rate. Using this historical information as the basis for your calculations, what is the probability of loss over the next year if you put all your money into

a. Small-cap stocks?

b. Large-cap stocks?

c. Long-term bonds?

d. Treasury bills?

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