Question

Problem 10-18 Return Distributions [LO 3]

Consider the following table for different assets for 1926 through 2011.

Series	Average return		Standard Deviation
Large-company stocks	11.8	%	20.3	%
Small-company stocks	16.5		32.5
Long-term corporate bonds	6.4		8.4
Long-term government bonds	6.1		9.8
Intermediate-term government bonds	5.5		5.7
U.S. Treasury bills	3.6		3.1
Inflation	3.1		4.2

Requirement 1:

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 answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Expected range of returns

% to %

Requirement 2:

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).)

Expected range of returns

% to %

rev: 05_02_2015_QC_CS-15225

References

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Answer 1