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Question: Returns on the stock market and Treasury bills are listed in the table below for a 5-year period. An investor is deciding whether or
Question: Returns on the stock market and Treasury bills are listed in the table below for a 5-year period. An investor is deciding whether or not to make an investment in a stock. Given the data presented and a forecasted Treasury bill return 1.90%, what is the expected return on the stock investment?
Returns %
Year Treasury bills Stock market index
1 0.92% 10.50%
2 0.77% 9.60%
3 1.05% 10.93%
4 0.97% 10.06%
5 1.20% 10.87%
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