Homework Answers
From Table 5.3, we find that for the period 1927 - 2016, the mean excess return for S&P 500 over T-bills is 8.48%.
E(r) = Risk-free rate + Risk premium = 4.4% + 8.48% = 12.88%
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TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic...
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
5. Using Table 5.3 as your guide, what is your estimate of the expected annual HPR...
5.
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%? (Round your answer to 2 decimal places.) Expected annual HPR TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks 11.91 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 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...
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
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...
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
5.
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%? (Round your answer to 2 decimal places.) Expected annual HPR TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks 11.91 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 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 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
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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