  We characterize the expected statistical errors with which the parameters of
black-hole binaries can be measured from gravitational-wave (GW) observations
of their inspiral, merger and ringdown by a network of second-generation
ground-based GW observatories. We simulate a population of black-hole binaries
with uniform distribution of component masses in the interval $(3,80)~M_\odot$,
distributed uniformly in comoving volume, with isotropic orientations. From
signals producing signal-to-noise ratio $\geq 5$ in at least two detectors, we
estimate the posterior distributions of the binary parameters using the
Bayesian parameter estimation code LALInference. The GW signals will be
redshifted due to the cosmological expansion and we measure only the
"redshifted" masses. By assuming a cosmology, it is possible to estimate the
gravitational masses by inferring the redshift from the measured posterior of
the luminosity distance. We find that the measurement of the gravitational
masses will be in general dominated by the error in measuring the luminosity
distance. In spite of this, the component masses of more than $50\%$ of the
population can be measured with accuracy better than $\sim 25\%$ using the
Advanced LIGO-Virgo network. Additionally, the mass of the final black hole can
be measured with median accuracy $\sim 18\%$. Spin of the final black hole can
be measured with median accuracy $\sim 5\% ~(17\%)$ for binaries with
non-spinning (aligned-spin) black holes. Additional detectors in Japan and
India significantly improve the accuracy of sky localization, and moderately
improve the estimation of luminosity distance, and hence, that of all mass
parameters. We discuss the implication of these results on the observational
evidence of intermediate-mass black holes and the estimation of cosmological
parameters using GW observations.
