Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Annual Returns for Stocks, Bonds, and T-Bills 2000 to 2009 Stocks (S&P 500) Bonds T-bills 2000 Annual return 9.1 % 20.1 % 5.9 % 2001

Annual Returns for Stocks, Bonds, and T-Bills 2000 to 2009

Stocks (S&P 500) Bonds T-bills
2000 Annual return 9.1 % 20.1 % 5.9 %
2001 Annual return 11.9 4.6 3.5
2002 Annual return 22.1 17.2 1.6
2003 Annual return 28.7 2.1 1.0
2004 Annual return 10.9 7.7 1.4
2005 Annual return 4.9 6.5 3.1
2006 Annual return 15.8 1.9 4.7
2007 Annual return 3.5 9.8 4.4
2008 Annual return 35.5 22.7 1.5
2009 Annual return 23.5 12.2 0.2

You have a portfolio with an asset allocation of 54 percent stocks, 40 percent long-term Treasury bonds, and 6 percent T-bills. Use these weights and the returns is given in the above table to compute the return of the portfolio in the year 2000 and each year since. Then compute the average annual return and standard deviation of the portfolio. (Negative answers should be indicated with a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Portfolio Return
2000 %
2001 %
2002 %
2003 %
2004 %
2005 %
2006 %
2007 %
2008 %
2009 %
Average %
Std dev %

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_2

Step: 3

blur-text-image_3

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

Bankers Handbook On Credit Management

Authors: Indian Institute Of Banking & Finance

1st Edition

9387957853, 978-9387957855

More Books

Students also viewed these Finance questions