What is the probability that in any given year

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Suppose the average return on FTSE TMX Canada long-term bonds is 6.70% and the standard deviation is 7.90% and the average return and standard deviation on T-bills are 3.80% and 3.40%, respectively. Further assume that the returns are normally distributed

Problem 1: What is the probability that in any given year, the return on long-term corporate bonds will be greater than 9%? Less than 0%?

Problem 2: What is the probability that in any given year, the return on T-bills will be greater than 9%? Less than 0%?

Problem 3: In 1981, the return on FTSE TMX Canada long-term bonds was -4.34%. How likely is it that such a low return will recur at some point in the future?

Reference no: EM132822768

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