If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on the information below. Small Stocks S&P 500 Corporate Bonds T-Bills Average Return 18.83% 11.44% 6.81% 3.84% Standard Deviation of returns 38.81% 20.07% 6.69% 3.25%

Between -28.7% and 51.58%

Explanation:

95% of the time would mean a 95% interval which would mean that it is between -2 and +2 standard deviation as it is Normally distributed.

We can therefore use the following formula to find the confidence interval,

= Average return + (2 * standard deviation) and,

= Average - return (2 * standard deviation)

= 11.44% + (2*20.07%)

= 0.5158

= 51.58%

and

= 11.44% - (2*20.07%)

= -0.287

= -28.7%

Between -28.7% and 51.58% is the range of returns expected to be seen 95% of the time.

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answer; the nav calculated at the market close at 4: 00 pm new york time;