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The following information is available concerning the historical risk and return relationships in the U.S. capital markets: U.S. CAPITAL MARKETS TOTAL ANNUAL RETURNS, 1990-2015 Arithmetic Geometric Standard Deviation Investment Category Mean Mean of Returna Common stocks 10.58% 9.38% 19.0% Treasury bills 4.22 4.17 3.7 Long-term government bonds 5.15 4.94 7.3 Long-term corporate bonds 5.85 5.46 9.6 Real estate 9.84 9.80 4.9 aBased on arithmetic mean. a. Explain why the geometric and arithmetic mean returns are not equal and whether one or the other may be more useful for investment decision making. The arithmetic average assumes -Select- , while the geometric average assumes -Select- b. For the time period indicated, rank these investments on a relative basis using the coefficient of variation from most to least desirable. Do not round intermediate calculations. Round your answers to two decimal places. Rank Investment Category Coefficient of variation, % 1 -Select- V 2 -Select- 3 -Select- 4 -Select- 5 -Select- C. Assume the arithmetic mean returns in these series are normally distributed. Calculate the range of returns that an investor would have expected to achieve 95 percent of the time from holding common stocks. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. Arithmetic: from % to % The arithmetic average assumes - Select- For the time period indicated, rar-Select- round intermediate calculations. compounding or interest-on-interest ba al JO the presence of simple interest , while the geometric average assumes - Select- basis using the coefficient of variation fr -Select- I places. compounding or interest-on-interest ory Coefficient of variation, % the presence of simple interest Rank Investment Category Coefficient of variation, % 1 -Select- 3 2 -Select- 3 4 Common Stocks 5 Long-term corporate bonds returns in these Long-term government bonds ent of the time fr sign to enter ne Real estate ed. Calculate the range of returns that a Do not round intermediate calculations. % to Treasury bills