S&P 500 Microsoft Realized Realized Return Return 1-Month T-Bill Return 27.86 Question 1 [10 points] Use the data in the following table: Year End S&P 500 Dividends Index Paid* 2004 1211.92 2005 1248.29 23.15 2006 1418.3 27.16 2007 1468.36 2008 903.25 21.85 2009 1115.1 27.19 2010 1257.64 25.44 2011 1257.61 26.59 2012 1426.19 32.67 2013 1848.36 39.75 2014 2058.9 42.47 2015 2043.94 43.45 2016 2238.83 49.56 2673.61 53.99 4.90% 15.80% 5.50% -37.00% 26.50% 15.10% 2.10% 16.00% 32.40% 13.70% 1.40% 12.00% 21.80% -0.90% 15.80% 20.80% -44.40% 60.50% -6.50% -4.50% 5.80% 44.30% 27.60% 22.70% 15.10% 40.70% 3.00% 4.80% 4.70% 1.50% 0.10% 0.10% 0.00% 0.10% 0.00% 0.00% 0.00% 0.20% 0.80% 2017 a) What was the average dividend yield for the S&P 500 from 2005-2017? b) What was the volatility of the dividend yield? c) What was the average annual return of the S&P 500 from 2005-2017 excluding dividends (i.e., from capital gains only)? d) What was the volatility of the S&P 500 returns from capital gains? e) Were dividends or capital gains a more important component of the S&P 500's average returns during this period? Which were the more important source of volatility