1) Over the 1957-2005 period, the standard deviation of returns for long bonds has averaged ___________ per year. A. 3.25% B. 8.65% C. 10.15% D. 20.35% E. 33.85%

2)

. An investor purchased a stock for $1.61 per share, held it for one year, and sold it for

$3.03 a share. The stock did not pay a dividend. Inflation for that year was 3.2% and Treasury

bills returned 3.7%. What is the real rate of return on this investment?

Please elaborate