Suppose the average return on FTSE TMX Canada long-term bonds is 7.00% and the standard deviation is 8.20% and the average return and standard deviation on T-bills are 4.10% 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 11%? Less than 0%?

Greater than 11%

%

Less than 0%

%

b. What is the probability that in any given year, the return on T-bills will be greater than 11%? Less than 0%?

Greater than 11%

%

Less than 0%

%

c-1. In 1981, the return on FTSE TMX Canada long-term bonds was -4.37%. 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 10.80% 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 %