QUESTION $1$

Year S&P $500$

Small Stocks Corp Bonds World Portfolio Treasury Bills CPI

$1929$ minus$0\mathrm{.}08907$ minus$0\mathrm{.}504670\mathrm{.}04321$ minus$0\mathrm{.}076920\mathrm{.}047370\mathrm{.}00746$

$1930$ minus$0\mathrm{.}25257$ minus$0\mathrm{.}455830\mathrm{.}06343$ minus$0\mathrm{.}225740\mathrm{.}02347$ minus$0\mathrm{.}06420$

$1931$ minus$0\mathrm{.}43858$ minus$0\mathrm{.}50216$ minus$0\mathrm{.}02380$ minus$0\mathrm{.}393050\mathrm{.}01023$ minus$0\mathrm{.}09235$

$1932$ minus$0\mathrm{.}088610\mathrm{.}086960\mathrm{.}121980\mathrm{.}030300\mathrm{.}00806$ minus$0\mathrm{.}10465$

$19330\mathrm{.}528951\mathrm{.}872000\mathrm{.}052550\mathrm{.}664490\mathrm{.}002930\mathrm{.}00974$

$1934$ minus$0\mathrm{.}023410\mathrm{.}252090\mathrm{.}097280\mathrm{.}025520\mathrm{.}001550\mathrm{.}01286$

$19350\mathrm{.}472080\mathrm{.}647390\mathrm{.}068600\mathrm{.}227820\mathrm{.}001650\mathrm{.}03175$

$19360\mathrm{.}328010\mathrm{.}875080\mathrm{.}062200\mathrm{.}192830\mathrm{.}001750\mathrm{.}01231$

$1937$ minus$0\mathrm{.}35258$ minus$0\mathrm{.}534030\mathrm{.}02546$ minus$0\mathrm{.}169500\mathrm{.}003190\mathrm{.}03040$

$19380\mathrm{.}331990\mathrm{.}262750\mathrm{.}043570\mathrm{.}056140\mathrm{.}00041$ minus$0\mathrm{.}02950$

$1939$ minus$0\mathrm{.}009100\mathrm{.}001840\mathrm{.}04247$ minus$0\mathrm{.}014410\mathrm{.}000080\mathrm{.}00000$

$1940$ minus$0\mathrm{.}10082$ minus$0\mathrm{.}123400\mathrm{.}045120\mathrm{.}03528$ minus$0\mathrm{.}000580\mathrm{.}00912$

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Given the data here, $.$

$.$

a$.$ Compute the average return for each of the assets from

$1929$ to $1940($the Great Depression$).$

b$.$ Compute the variance and standard deviation for each of the assets from

$1929$ to $1940$

$.$

c$.$ Which asset was riskiest during the Great Depression? How does that fit with your intuition?

Note:

Notice that the answers for average return, variance and standard deviation must be entered in decimal format.

Part $1$

a$.$ Compute the average return for each of the assets from

$1929$ to $1940($the Great Depression$).$

The average return for the S&P $500$ was

enter your response here.

$($Round to five decimal places.$)$

QUESTION $2$

Historical Stock and Dividend Data for Boeing

Date Price Dividend Date Price Dividend

$1/2/200886\mathrm{.}621/3/201166\mathrm{.}40$

$2/6/200879\mathrm{.}910\mathrm{.}402/9/201172\mathrm{.}630\mathrm{.}42$

$5/7/200884\mathrm{.}550\mathrm{.}405/11/201179\mathrm{.}080\mathrm{.}42$

$8/6/200865\mathrm{.}400\mathrm{.}408/10/201157\mathrm{.}410\mathrm{.}42$

$11/5/200849\mathrm{.}550\mathrm{.}4011/8/201166\mathrm{.}650\mathrm{.}42$

$1/2/200945\mathrm{.}251/3/201274\mathrm{.}22$

Using the data in the following table,

$,$

calculate the return for investing in Boeing stock $($BA$)$ from January $2,2008,$ to January $2,2009,$ and also from January $3,2011,$ to January $3,2012,$ assuming all dividends are reinvested in the stock immediately.

Part $1$

Return from January $2,2008,$ to January $2,2009$ is

enter your response here$\%.$

$($Round to two decimal places.$)$

QUESTION THREE

Starbucks Tiffany & Co$.$ Hershey McDonald's

Beta $0\mathrm{.}801\mathrm{.}770\mathrm{.}330\mathrm{.}63$

You turn on the news and find out the stock market has gone up $9\%9\%.$

Based on the data in the table here,

$,$

by how much do you expect each of the following stocks to have gone up or down: $(1)$ Starbucks, $(2)$ Tiffany & Co$.,(3)$ Hershey, and $(4)$ McDonald's.

Part $1$

The expected change in the Starbucks stock is enter your response here$\%.$

$($Round to one decimal place.$)$

QUESTION FOUR

Starbucks Hershey Autodesk

Beta $0\mathrm{.}800\mathrm{.}331\mathrm{.}72$

Suppose the market risk premium is $6\%6\%$ and the risk$-$free interest rate is $5\%5\%.$

Using the data in the table,

$,$

calculate the expected return of investing in

a$.$ Starbucks' stock.

b$.$ Hershey's stock.

c$.$ Autodesk's stock.

a$.$ Starbuck's stock.

The expected return of Starbucks stock is

enter your response here$\%.$

$($Round to two decimal places.$)$