Consider the following table for the total annual returns for a given period of

Question

Consider the following table for the total annual returns for a given period of time.

  Series

Average return

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

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).)

  Series

Average return

Standard Deviation   Large-company stocks 11.7 % 19.5 %   Small-company stocks 16.4
33.0
  Long-term corporate bonds 6.2
8.4
  Long-term government bonds 6.1
9.4
  Intermediate-term government bonds 5.6
5.7
  U.S. Treasury bills 3.8
3.1
  Inflation 3.1
4.2

Explanation / Answer

Requirement (1)

  Expected range of returns -7.80% to 31.20%

Requirement (2)

Expected range of returns: -27.3% to 50.7%

Large company stock Average (mean) return 11.70% Standard Deviation 19.50%

Requirement (1)

Range of return: 68% of time: Average (mean) return+/- 1* Standard Deviation 11.70%+19.50%, 11.70%-19.50% 31.20%; -7.80%

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