Required:

Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk-

free interest rate is 3%? (Round your answer to 2 decimal places.)w

TABLE 5.3 Risk and return of investments in major asset classes, 19272018 Average Risk premium Standard deviation max min T-bills 3.38 na 3.12 14.71 -0.02 T-bonds 5.83 2.45 11.59 41.68 -25.96 Stocks 11.72 8.34 20.05 57.35 44.04