Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

5. Download the data from the following data table! Click on the icon located on the top right corner of the date table in order

image text in transcribedimage text in transcribed

5. Download the data from the following data table! Click on the icon located on the top right corner of the date table in order to copy its contents into a spreadsheet. 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.) The average return for the Small Stocks was (Round to five decimal places.) . (Round to five decimal places.) The average return for the Corp Bonds was The average return for the World Portfolio was The average return for the Treasury Bills was (Round to five decimal places.) (Round to five decimal places.) The average for the CPI was . (Round to five decimal places.) b. Compute the variance and standard deviation for each of the assets from 1929 to 1940. The variance for the S&P 500 was (Round to five decimal places.) The variance for the Small Stocks was (Round to five decimal places.) The variance for the Corp Bonds was (Round to five decimal places.) The variance for the World Portfolio was (Round to five decimal places.) The variance for the Treasury Bills was (Round to five decimal places.) The variance for the CPI was . (Round to five decimal places.) The standard deviation for the S&P 500 was (Round to live decimal places.) The standard deviation for the Small Stocks was . (Round to five decimal places.) The standard deviation for the Corp Bonds was (Round to five decimal places.) The standard deviation for the World Portfolio was (Round to five decimal places.) The standard deviation for the Treasury Bills was (Round to five decimal places.) The standard deviation for the CPI was (Round to five decimal places.) c. Which asset was riskiest during the Great Depression? How does that fit with your intuition? OA. The riskiest assets were the corporate bonds. Intuition tells us that company debt should be riskiest. OB. The riskiest assets were the Treasury Bills. Intuition tells us that government securities would be the riskiest. OC. The risklest assets were the small stocks. Intuition tells us that smaller companies should be risklest. OD. The riskiest assets were the stocks in the S&P 500. Intuition tells us that large companies should be the riskiest. 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). Small World Year S&P 500 Corp Bonds Treasury Bills CPI Stocks Portfolio 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

De Gruyter Handbook Of Entrepreneurial Finance

Authors: David Lingelbach

1st Edition

3110726750,3110726351

More Books

Students also viewed these Finance questions

Question

Different formulas for mathematical core areas.

Answered: 1 week ago