Posted by Michelle on Wednesday, March 6, 2013 at 9:34am.
1. Suppose that the mean of the annual return for common stocks from 1950 to 2012 was 9.4%, and the standard deviation of the annual return was 17.5%. Suppose also that during the same 62year time span, the mean of the annual return for longterm government bonds was 4.6%, and the standard deviation was 8.0%. The distributions of annual returns for both common stocks and longterm government bonds are bellshaped and approximately symmetric in this scenario. Assume that these distributions are distributed as normal random variables with the means and standard deviations given previously.

Business Statistics  Dr. Jane, Wednesday, March 6, 2013 at 9:35am
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