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Chapter 02: Assignment - Asset Allocation and Security Selection The following information is available concerning the historical risk and return relationships in the U.S. capital

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Chapter 02: Assignment - Asset Allocation and Security Selection The following information is available concerning the historical risk and return relationships in the U.S. capital markets: a. Explain why the geometric and arithmetic mean retums are not equal and whether one or the other may be more useful for investment decision making. The arithmetic average assumes , while the geometric averege assumes b. For the time peried indicated, rank these investments on a relative basis using the coefficient of variation from most to least desirable. Do not round intermediate calculations, Round your answers to two decimal places. c. Assume the arithmetic mean returns in these series are normally distributed. Calculate the range of returns that an investor would have expected to achieve 95 percent of the time from holding long-term government bonds. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. Arithmetic: from

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