Assume that long-term corporate bonds had an average return of 5.3 percent and a standard deviation of 9.3 percent for a 30-year period.What range of returns would you expect to see on these bonds 68 percent of the time?

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Quizplus · Accepted Answer

Geometric average = (1.11 × 0.92 × 1.06 ×1.21 × 1.24 × 1.16)^1/6 - 1 = 11.13 percent68 percent range = 5.3 percent ± 9.3 percent = -4.0 percent to 14.6 percent

Assume That Long-Term Corporate Bonds Had an Average Return of 5.3