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Risk. Suppose you are evaluating the risk of 10 year US Treasury bonds. The returns from the previous five years are listed below. Year 2016

Risk. Suppose you are evaluating the risk of 10 year US Treasury bonds. The returns from the previous five years are listed below.

Year

2016

2017

2018

2019

2020

10Yr TBonds Return

14.04%

2.97%

9.18%

10.75%

1.55%

a. Calculate the average annual return, the variance of returns, and the volatility of returns. (6 points)

b. Calculate the range of values we can be 95% sure returns will fall within. (4 points)

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