Suppose the returns on long-term government bonds are normally distributed. Assu

Question

Suppose the returns on long-term government bonds are normally distributed. Assume long-term government bonds have a mean return of 5.3 percent and a standard deviation of 8.8 percent.

What is the probability that your return on these bonds will be less than 3.5 percent in a given year? Use the NORMDIST function in Excel ® to answer this question. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (eg., 32.16).)

What range of returns would you expect to see 68 percent of the time? (Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

What range would you expect to see 95 percent of the time? (Negative amount should be indicated by a minus sign. Input your answers from lowest to highest to receive credit for your answers. Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Suppose the returns on long-term government bonds are normally distributed. Assu

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