Problem 10-18 Return Distributions [LO 3] Series Average return What range of re

Question

Problem 10-18 Return Distributions [LO 3]

  Series

Average return

What range of returns would you expect to see 68 percent of the time for large-company stocks? (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 about 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 answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Series Average return Standard Deviation for 68 percent of time   Large-company stocks 11.9 % 20.3 % 32.2 -8.4 32.2%to-8.4%   Small-company stocks 16.4 33 49.4 -16.6 49.4% to -16.6%   Long-term corporate bonds 6.2 8.4 14.6 -2.2 14.6% to -2.2%   Long-term government bonds 6.1 9.4 15.5 -3.3 15.5% to -3.3%   Intermediate-term government bonds 5.6 5.7 11.3 -0.1 11.3% to -0.1%   U.S. Treasury bills 3.8 3.1 6.9 0.7 6.9% to 0.7%   Inflation 3.1 4.2 7.3 -1.1 7.3% to -1.1% Series Average return Standard Deviation for 95 percent of time   Large-company stocks 11.9 % 20.3 52.5 -28.7 52.5%to -28.7%   Small-company stocks 16.4 33 82.4 -49.6 82.4%to -49.6%   Long-term corporate bonds 6.2 8.4 23 -10.6 23%to -10.6%   Long-term government bonds 6.1 9.4 24.9 -12.7 24.9%to -12.7%   Intermediate-term government bonds 5.6 5.7 17 -5.8 17%to -5.8%   U.S. Treasury bills 3.8 3.1 10 -2.4 10%to -2.4%   Inflation 3.1 4.2 11.5 -5.3 11.5%to -5.3%

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