Series Average return What range of returns would you expect to see 68 percent o

ID: 2777154 • Letter: S

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Series

Average return

What range of returns would you expect to see 68 percent of the time for long-term corporate bonds? (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 answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Consider the following table for the total annual returns for a given period of time.

Explanation / Answer

AR = 6.80%

SD = 9.80%

We have following formula for range for 68% probability:

Range = AR-SDto AR+SD

= 6.8%-9.8%to 6.8%+9.8%

= -3.% to 16.60%

We have following formula for range for 95% probability:

Range = AR-SDto AR+SD

= 6.8%-2x9.8%to 6.8%+2x9.8%

= -12.80% to 26.40%

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Series Average return What range of returns would you expect to see 68 percent o

Series Average return What range of returns would you expect to see 95 percent o

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Series Average return What range of returns would you expect to see 68 percent o

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