The file P3_68.XLS contains the monthly interest rates (from 1985 to 1995) on 3-month government T-bills. For example, in January 1985, 3-month T bills yielded 7.76% annual interest. To succeed in investments, it is important to understand the characteristics of the monthly changes in T-bill rates.

a. Construct a histogram of the monthly changes in interest rates. Try to choose categories so that you get an “interesting” histogram.

b. Do the rules of thumb hold for changes in monthly interest rates?

c. Based on the given data, there is a 5% chance that during a given month T-bill rates will increase by less than what value? (A negative number is allowed here.)

d Based on the given data, there is a 10% chance that during a given month T bill rates will increase by at least what number?

e. Based on the given data, estimate the chances that T-bill rates during a given month will increase by more than 0.5%.