Homework Answers
| Year | Stock Return (A) | Bond Return (B) | T bills Return (C) | Portfolio Return (A+B+C) | |||||
| 2010 | 15.10%*50% = | 7.550% | 9.40%*38% = | 3.572% | 0.01%*12% = | 0.001% | 11.123% | ||
| 2011 | 2.10%*50% = | 1.050% | 29.9%*38% = | 11.362% | 0.02%*12% = | 0.002% | 12.414% | ||
| 2012 | 16%*50% = | 8.000% | 3.60%*38% = | 1.368% | 0.02%*12% = | 0.002% | 9.370% | ||
| 2013 | 32.40%*50% = | 16.200% | -12.7%*38% = | -4.826% | 0.07%*12% = | 0.008% | 11.382% | ||
| 2014 | 13.70%*50% = | 6.850% | 25.10%*38% = | 9.538% | 0.05%*12% = | 0.006% | 16.394% | ||
| 2015 | 1.40%*50% = | 0.700% | -1.20%*38% = | -0.456% | 0.21%*12% = | 0.025% | 0.269% | ||
| 2016 | 12.0%*50% = | 6.000% | 1.20%*38% = | 0.456% | 0.51%*12% = | 0.061% | 6.517% | ||
| 2017 | 21.80%*50% = | 10.900% | 8.40%*38% = | 3.192% | 1.39%*12% = | 0.167% | 14.259% | ||
| Average ( μ ) | 10.215% | ||||||||
Standard deviation for portfolio returns is 4.674
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