Look at the record of stock returns below. A) How would you compare the average annual returns for the various decades? B) Considering the average annual returns that have been generated over holding periods of 10 years or more, what rate of return do you feel is t ypical for the stock market in general? Is it unreasonable to expect this kind of return, on average, in the future? explain

Rate of Return from dividends rate of return from capital gains average annual total return

1930s 5.7% -1.4% 4.3%

1940s 5.8% 3.8% 9.6%

1950s 4.7% 16.2% 20.9%

1960s 3.2% 5.4% 8.6%

1970s 4.2% 3.3% 7.5%

1980s 4.1% 13.8% 17.9%

1990s 2.4% 16.5% 18.9%

2000-2009 1.8% -0.7% 1.1%

1900-2014 3.9% 7.5% 11.4%