## [solution]: 24. Using Probability Distributions Suppose the returns on long-term corpo- rate bonds and...

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24.        Using Probability Distributions   Suppose the returns on long-term corpo- rate 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?

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