Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

6. The S&P500 Index has an annual return of 11.5% and 18% volatility over the last 80 years. For small cap stocks, it has been

6. The S&P500 Index has an annual return of 11.5% and 18% volatility over the last 80 years. For small cap stocks, it has been 15.6% for return and 21.2% for volatility. The average of the bond market index over the same period has return of 5.5% and 6.3% volatility. What is the 40-year forecast of range of return for all 3 asset classes? And what is unusual about the lower range for the stock market and the higher range for the bond market?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Fundamentals of Corporate Finance

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

11th edition

77861701, 978-0077861704

Students also viewed these Finance questions