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Sheet 2 of the workbook contains data on the ve assets analyzed above, as well as twelve additional assets, over the period 1990-2015. The added

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Sheet 2 of the workbook contains data on the ve assets analyzed above, as well as twelve additional assets, over the period 1990-2015. The added assets are: real estate, oil, gold, timber, venture capital, private equity, hedge funds (energy, emerging markets, macro, and distress), the Europe Australia Far East index of international stocks (EAFE), and high-yield corporate bonds. a. Compute the arithmetic mean return for each of the seventeen assets as well as Tbills. Sort the mean returns from highest to lowest and create a column graph, with labeis. How do the returns of the twelve new assets compare to the ve traditional US. stock and bond portfolios over this time period? Compute the correlation matrix for the seventeen assets, lling in the upper triangle of the matrix. Which asset shows the highest correlation with energy hedge funds? Which asset shows the highest correlation with real estate returns? Extract the column of correlations for LRGSTK, sort these correlations from highest to lowest, and create a column graph, with labels. Suppose we consider a correlation of 0.70 to be \"high.\" Which assets have a high correlation with large US. stocks and which have a low correlation? Pick one of the seventeen assets and create a graph that illustrates the growth of a dollar invested in the asset over 1990-2015. For comparison, on the same graph illustrate the growth of a dollar invested in the composite US. stock market series (MARKET) over this time period. (Use a line graph.) Sheet 3 of the workbook contains monthly stock price data for Widgets Our Way Inc. (WOW). Use the prices to create a series of monthly returns. a. Compute the arithmetic mean monthly return. Annualize this number, assuming monthly compounding. The average annual return on the US. stock market was 9.9% over this time period. If the risk of WOW were similar to that of the market, would this seem to be a good performing stock based on this return? Create a line graph of the stock price data. Based on this graph, was WOW stock a good investment over this period of time (1990-2015)? Compute the geometric mean monthly return. Annualize this number, assuming monthly compounding. Based on this return, would this seem to be a good performing stock? Which of the two means, arithmetic or geometric, gives an accurate indication of this stock's performance over this period of time? Can you explain the discrepancy between the two measures

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