1)

Year S&P 500 Small Stocks Corp Bonds World Portfolio Treasury Bills CPI 1929 -0.08906 -0.43081 0.04320 -0.07692 0.04471 0.00585 1930 -0.25256 -0.44698 0.06343 -0.22574 0.02266 -0.06395 1931 -0.43861 -0.54676 -0.02380 -0.39305 0.01153 -0.09317 1932 -0.08854 -0.00471 0.12199 0.03030 0.00882 -0.10274 1933 0.52880 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 0.06860 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 -0.16950 0.00267 0.02857 1938 0.33204 0.08928 0.04357 0.05614 0.00060 -0.02778 1939 -0.00914 0.04327 0.04247 -0.01441 0.00042 0.00000 1940 -0.10078 -0.28063 0.04512 0.03528 0.00037 0.00714

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?

2) The following table contains prices and dividends for a stock. All prices are after the dividend has been paid. If you bought the stock on January 1 and sold it on December 31, what is your realized return?Hint: Make sure to round all intermediate calculations to at least five decimal places.

Price Dividend Jan 1 10.00 Mar 31 11.00 0.20 Jun 30 10.50 0.20 Sep 30 11.10 0.20 Dec 31 11.00 0.20