Question
Asset Average Return Standard Deviation Canadian common stocks 13.20% 16.62% US common stocks 15.59% 16.86% Long bonds 7.64% 10.57% Small-company stocks 14.79% 23.68% Treasury bills
| Asset | Average | Return Standard Deviation |
| Canadian common stocks | 13.20% | 16.62% |
| US common stocks | 15.59% | 16.86% |
| Long bonds | 7.64% | 10.57% |
| Small-company stocks | 14.79% | 23.68% |
| Treasury bills | 6.04% | 4.04% |
What is the historical risk premium on Canadian common stocks? (7.16%)
What is the historical risk premium of Canadian common stocks over long bonds? (5.56%)
Based on the historical data above, what is your reward for bearing risk of owning small-company stocks rather than Canadian common stocks? (1.59%)
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Forecasting And Predictive Analytics With Forecast X
Authors: Barry Keating, J. Holton Wilson, John Solutions Inc.
7th International Edition
1260085236, 9781260085235
