Question: Suppose nominal bond returns approximately follow a normal distribution. Using the data in Table, construct a range that should contain 95 percent of historical bond

Suppose nominal bond returns approximately follow a normal distribution. Using the data in Table, construct a range that should contain 95 percent of historical bond returns. Next, refer to Figure. Is the number of years with bond returns outside the range you just calculated approximately what you expected?

Real Retums Nominal Returns Average Std. Dev Std. Dev. Average Asset Equities Bonds Bills 11.7 5.2 4.0 19.8 8.2 2.8 8.5 2.3 20.1 9.9 4.7

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