Requirement 1: What range of returns would you expect to see 95 percent of the t

Question

Requirement 1: What range of returns would you expect to see 95 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).) Requirement 2: What about 99 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).)

Explanation / Answer

95% confidence value =+/- 1.96 99% confidence value =+/-2.58 Average return Std Deviation Long term Corporate Bonds 6.9% 9.9% Expected Range of returns = Mean +/-Std deviation*z value For 95% time the range will be =6.9% +/-9.9%*1.96 So range of return = -12.50% to   26.30% For 99% of time the range will be =Mean +/-9.9%*2.58 So range of return = -18.64% to   32.24%

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