Compute the return on t-bills

Assignment Help Finance Basics
Reference no: EM131732521

Question: Using Probability Distributions. Suppose the returns on long-term corporate bonds and T-bills are normally distributed. Based on the historical record, use the NORMDIST function in Excel® to answer the following questions:

a. What is the probability that in any given year, the return on long-term corporate bonds will be greater than 10 percent? Less than 0 percent?

b. What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent?

c. In 1979, the return on long-term corporate bonds was -4.18 percent. How likely is it that such a low return will recur at some point in the future? T-bills had a return of 10.56 percent in this same year. How likely is it that such a high return on T-bills will recur at some point in the future?

Reference no: EM131732521

Questions Cloud

Discuss the issues associated with federalism : Discuss the issues associated with federalism and what local, state, and federal policy makers need to consider when developing emergency response policies?'
Solve problem using probability distributions : Using Probability Distributions. Suppose the returns on large-company stocks are normally distributed. Based on the historical record, use the NORMDIST.
Intended purpose by spying on us citizens : Does the PATRIOT Act overreach its intended purpose by spying on U.S. citizens who are not engaging in terror activities?
How epidemiological studies impact interventions to reduce : Discuss risks and how epidemiological studies impact interventions to reduce risks.
Compute the return on t-bills : What is the probability that in any given year, the return on T-bills will be greater than 10 percent? Less than 0 percent?
Fruit of the poisonous tree : Explain the significance of the "fruit of the poisonous tree" doctrine as it applies to homeland security. Why is this doctrine so important in the fight agains
Determine your approach to communicate mission statements : Then determine your approach to communicate the mission, vision, and value statements for the strategic planning. Provide a rationale for your response.
Discuss about the clinical epidemiology : In clinical epidemiology you have to take into account the risks of the populations. There are general risks that everyone will be exposed .
Discuss about the returns of the arias small-cap fund : You recently graduated from college, and your job search led you to S&S Air. Because you felt the company's business was headed skyward.

Reviews

Write a Review

Finance Basics Questions & Answers

  Uses under the lockbox system

What amount of cash will be made available for other uses under the lockbox system?

  Present value of an annuity

What effect does decreasing the interest rate have on the present value of an annuity?

  Debt-capital structure and borrowing costs

You know that the return of Momentum Cyclicals' common shares reacts to macroeconomic information 1.80 more times than the return of the market.

  Which is the best measure for an asset held

Which is the best measure of risk for a single asset held in isolation, and which is the best measure for an asset held in a diversified portfolio?

  What are the risks of investing in bonds

What are the risks of investing in bonds? How can each type of risk be measured and managed?

  Depreciation on the equipment to produce the board

Calculating Project OCF. Rolston Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $27,300.

  Maximum debt burden per month

Lindsey has a job with monthly take-home pay of $3,500. Using the suggested maximum debt safety ratio, what maximum debt burden per month can she assume?

  Determine the allocation rate for activity

Using ABC techniques, determine the allocation rate for each activity. Now, using this allocation rate, estimate the total cost of performing each test.

  Define case study of procter and gamble versus bankers trust

Procter and Gamble versus Bankers Trust: Caveat Emptor (Thunderbird Case A06-05-0001, European Case Clearing House). The case analyzes a complex interest rate.

  How many shares can be purchased in lieu

If the firm can repurchase stock at $62/share, (a) how many shares can be purchased in lieu of making dividend payment; (b) How much will the EPS be before and after the repurchase? (c) If the P/E ratio of 15 remains the same what will be the mark..

  What will be the new price of the stock

Jersey Mining earns $9.50 a share, sells for $90, and pays a $6 per share dividend. The stock is spit two for one and a $3 per share cash dividend is declared.

  What is the rate of return on the stock

Investors expect the market rate of return this year to be 12%. A stock with a beta of .5 has an expected rate of return of 10%. If the market return this year turns out to be 9%, what is the rate of return on the stock?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd