Question: Using Probability Distributions [LO3] Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST function
![Using Probability Distributions [LO3] Suppose the returns on long-term corporate bonds](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2024/09/66ec68bde81cf_34166ec68bd47c91.jpg)
Using Probability Distributions [LO3] Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST function in Excel to answer the following questions: a. What is the probability that in any given year, the return on long-term corporate 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 long-term corporate bonds was -2.76 percent. How likely is it that such a low return 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 such a high return on T-bills will recur at some point in the future
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
