Question

Click on the Icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet. Yearly returns from 1929-1940 for the S&P 500, small stocks, corporate bonds, world portfolio, Treasury bills, and inflation (as measured by the CPI). S&P 500 Year 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 Small Stocks Corp BondsWorld Portfolio Treasury Bills CPI 0.08906 0.25256 0.43861 0.08854 0.52880 0.02341 0.47221 0.32796 0.35258 0.33204 0.00914 0.10078 0.43081 0.44698 0.54676 0.00471 2.16138 0.57195 0.69112 0.70023 0.56131 0.08928 0.04327 0.28063 0.04320 0.06343 0.02380 0.12199 0.05255 0.09728 0.06860 0.06219 0.02546 0.04357 0.04247 0.04512 0.07692 0.22574 0.39305 0.03030 0.66449 0.02552 0.22782 0.19283 0.16950 0.05614 0.01441 0.03528 0.04471 0.02266 0.01153 0.00882 0.00516 0.00265 0.00171 0.00173 0.00267 0.00060 0.00042 0.00037 0.00585 -0.06395 0.09317 0.10274 0.00763 0.01515 0.02985 0.01449 0.02857 0.02778 0.00000 0.00714 Download the data from the following data table a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression). b. Compute the variance and standard deviation for each of the assets from 1929 to 1940. c. Which asset was riskiest during the Great Depression? How does that fit with your intuition? a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression) The average return for the S&P 500 was.(Round to five decimal places.)

Answer 1

	Year	S & P 500	Small stock	Corp Bonds	World Portfolio	treasury bills	CPI
	1929	-0.08906	-0.43081	0.0432	-0.07692	0.04471	0.00585
	1930	-0.25256	-0.44698	0.06343	-0.22574	0.02266	-0.06395
	1931	-0.43861	-0.54676	-0.0238	-0.39305	0.01153	-0.09317
	1932	0.08854	-0.00471	0.12199	0.0303	0.00882	-0.10274
	1933	0.5288	2.16138	0.05255	0.66449	0.00516	0.00763
	1934	-0.02341	0.57195	0.09728	0.02552	0.00265	0.01515
	1935	0.47221	0.69112	0.0686	0.22782	0.00171	0.02985
	1936	0.32796	0.70023	0.06219	0.19283	0.00173	0.01449
	1937	-0.35258	-0.56131	0.02546	-0.1695	0.00267	0.02857
	1938	0.33204	0.08928	0.04357	0.05614	0.0006	-0.02778
	1939	-0.00914	0.04327	0.04247	-0.01441	0.00042	0
	1940	-0.10078	-0.28063	0.04512	0.03528	0.00037	0.00714
1-	Average = Using average function in M S excel	0.04028	0.16550	0.05351	0.02940	0.00859	-0.01491
2-	Variance = Using variance function in M S excel =varp(Year 1 return, year 2 return………………………………….year 12 return)	0.09233	0.56050	0.00118	0.06388	0.00016	0.00198
	Standard deviation = Using Stdevp function in MS excel =stdevp(year 1 return, year 2 return……………………………..year 12 return)	0.30386	0.74866	0.03436	0.25274	0.01254	0.04446
3-	Small stock was the highest riskiest during the period of great depresssion as its standard deviation is the highest in case of small stock	This fits into intution because small stocks are highly affected into a period of depression