Homework Answers
expected annual hpr on market index stock portfolio=risk free
rate+average stock risk premium
=3%+8.48%
=11.48%
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5.
Using Table 5.3 as your guide, what is your estimate of the expected annual HPR...
Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on...
Using Table 5.3 as your guide, what is your estimate of the
expected annual HPR on the market index stock portfolio if the
current risk-free interest rate is 3%?
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 -0.02
Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on...
Using Table 5.3 as your guide,
what is your estimate of the expected annual HPR on the market
index stock portfolio if the current risk-free interest rate is
4.6%? (Round your answer to 2 decimal places.)
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 -0.02
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic...
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 -0.02 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 Using Table 5.3as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk free interest rate is 4.4%? (Round your answer to 2 decimal places.) Expected annual HPR
Answer all questions and show work using hand formulas only. Do NOT answer the question if...
Answer all questions and show work using hand formulas only. Do
NOT answer the question if you cannot answer everything.
1.
2.
3.
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 -0.02 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index...
Refer to Table 12.1 and look at the period from 1970 through 1975.
Table 12.1 (below)TABLE 12.1 Year-to-Year Total Returns: 1926–2019YearLarge-Company StocksLong-Term Government BondsU.S. Treasury BillsConsumer Price Index192611.62%7.77%3.27%–1.49%192737.498.933.12–2.08192843.61.103.56–.971929–8.423.424.75.201930–24.904.662.41–6.031931–43.34–5.311.07–9.521932–8.1916.84.96–10.30193353.99–.07.30.511934–1.4410.03.162.03193547.674.98.172.99193633.927.52.181.211937–35.03.23.313.10193831.125.53–.02–2.781939–.415.94.02–.481940–9.786.09.00.961941–11.59.93.069.72194220.343.22.279.29194325.902.08.353.16194419.752.81.332.11194536.4410.73.332.251946–8.07–.10.3518.1619475.71–2.62.509.0119485.503.40.812.71194918.796.451.10–1.80195031.71.061.205.79195124.02–3.931.495.87195218.371.161.66.881953–.993.641.82.62195452.627.19.86–.50195531.56–1.291.57.3719566.56–5.592.462.861957–10.787.463.143.02195843.36–6.091.541.76195911.96–2.262.951.501960.4713.782.661.48196126.89.972.13.671962–8.736.892.731.22196322.801.213.121.65196416.483.513.541.19196512.45.713.931.921966–10.063.654.763.35196723.98–9.184.213.04196811.06–.265.214.721969–8.50–5.076.586.1119703.8612.116.525.49197114.3013.234.393.36197219.005.693.843.411973–14.69–1.116.938.801974–26.474.358.0012.20197537.239.205.807.01197623.9316.755.084.811977–7.16–.695.126.7719786.57–1.187.189.03197918.61–1.2310.3813.31198032.50–3.9511.2412.401981–4.921.8614.718.94198221.5540.3610.543.87198322.56.658.803.8019846.2715.489.853.95198531.7330.977.723.77198618.6724.536.161.1319875.25–2.715.474.41198816.619.676.354.42198931.6918.118.374.651990–3.106.187.816.11199130.4719.305.603.0619927.628.053.512.90199310.0818.242.902.7519941.32–7.773.902.67199537.5831.675.602.54199622.96–.935.213.32199733.3615.855.261.70199828.5813.064.861.61199921.04–8.964.682.682000–9.1021.485.893.392001–11.893.703.831.552002–22.1017.841.652.38200328.681.451.021.88200410.888.511.203.2620054.917.812.983.42200615.791.194.802.5420075.499.884.664.082008–37.0025.871.60.09200926.46–14.90.102.72201015.0610.14.121.5020112.1127.10.042.96201216.003.43.061.74201332.39–12.78.021.51201413.6924.71.02.7620151.38–.65.02.73201611.961.75.202.07201721.836.24.802.112018–4.38–.571.811.91201931.4912.162.142.29Questions:a.Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)b.Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)c-1.Calculate the observed risk premium...
Using Table 5.3 as your guide, what is your estimate of the
expected annual HPR on the market index stock portfolio if the
current risk-free interest rate is 3%?
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 -0.02
Using Table 5.3 as your guide,
what is your estimate of the expected annual HPR on the market
index stock portfolio if the current risk-free interest rate is
4.6%? (Round your answer to 2 decimal places.)
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 -0.02
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 -0.02 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 Using Table 5.3as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk free interest rate is 4.4%? (Round your answer to 2 decimal places.) Expected annual HPR
Answer all questions and show work using hand formulas only. Do
NOT answer the question if you cannot answer everything.
1.
2.
3.
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average Risk premium Standard deviation max min 3.42 N/A 3.14 14.71 -0.02 5.51 2.08 8.14 38.07 -8.47 11.91 8.48 19.99 56.38 -43.73 Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index...
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