Question
Standard deviation. Calculate the standard deviation of U.S. Treasury bills, long-term government bonds, and large-company stocks for 1985 to 19941985 to 1994 from Table 8.1.
Standard deviation.
Calculate the standard deviation of U.S. Treasury bills, long-term government bonds, and large-company stocks for
1985 to 19941985 to 1994 from Table 8.1. Which had the highest variance? Which had the lowest variance?
| Year | Three-Month U.S.Treasury Bills | Long-Term Government Bonds | Large Company Stocks | Small Company Stocks |
| 1950 | 1.20% | -0.96% | 32.68% | 48.45% |
| 1951 | 1.49% | -1.95% | 23.47% | 9.41% |
| 1952 | 1.66% | 1.93% | 18.91% | 6.36% |
| 1953 | 1.82% | 3.83% | -1.74% | -5.66% |
| 1954 | 0.86% | 4.88% | 52.55% | 65.13% |
| 1955 | 1.57% | -1.34% | 31.44% | 21.84% |
| 1956 | 2.46% | -5.12% | 6.45% | 3.82% |
| 1957 | 3.14% | 9.46% | -11.14% | -15.03% |
| 1958 | 1.54% | -3.71% | 43.78% | 70.63% |
| 1959 | 2.95% | -3.55% | 12.95% | 17.82% |
| 1960 | 2.66% | 13.78% | 0.19% | -5.16% |
| 1961 | 2.13% | 0.19% | 27.63% | 30.48% |
| 1962 | 2.72% | 6.81% | -8.79% | -16.41% |
| 1963 | 3.12% | -0.49% | 22.63% | 12.20% |
| 1964 | 3.54% | 4.51% | 16.67% | 18.75% |
| 1965 | 3.94% | -0.27% | 12.50% | 37.67% |
| 1966 | 4.77% | 3.70% | -10.25% | -8.08% |
| 1967 | 4.24% | -7.41% | 24.11% | 103.39% |
| 1968 | 5.24% | -1.20% | 11.00% | 50.61% |
| 1969 | 6.59% | -6.52% | -8.33% | -32.27% |
| 1970 | 6.50% | 12.69% | 4.10% | -16.54% |
| 1971 | 4.34% | 17.47% | 14.17% | 18.44% |
| 1972 | 3.81% | 5.55% | 19.14% | -0.62% |
| 1973 | 6.91% | 1.40% | -14.75% | -40.54% |
| 1974 | 7.93% | 5.53% | -26.40% | -29.74% |
| 1975 | 5.80% | 8.50% | 37.26% | 69.54% |
| 1976 | 5.06% | 11.07% | 23.98% | 54.81% |
| 1977 | 5.10% | 0.90% | -7.26% | 22.02% |
| 1978 | 7.15% | -4.16% | 6.50% | 22.29% |
| 1979 | 10.45% | 9.02% | 18.77% | 43.99% |
| 1980 | 11.57% | 13.17% | 32.48% | 35.34% |
| 1981 | 14.95% | 3.61% | -4.98% | 7.79% |
| 1982 | 10.71% | 6.52% | 22.09% | 27.44% |
| 1983 | 8.85% | -0.53% | 22.37% | 34.49% |
| 1984 | 10.02% | 15.29% | 6.46% | -14.02% |
| 1985 | 7.83% | 32.68% | 32.00% | 28.21% |
| 1986 | 6.18% | 23.96% | 18.40% | 3.40% |
| 1987 | 5.50% | -2.65% | 5.34% | -13.95% |
| 1988 | 6.44% | 8.40% | 16.86% | 21.72% |
| 1989 | 8.32% | 19.49% | 31.34% | 8.37% |
| 1990 | 7.86% | 7.13% | -3.20% | -27.08% |
| 1991 | 5.65% | 18.39% | 30.66% | 50.24% |
| 1992 | 3.54% | 7.79% | 7.71% | 27.84% |
| 1993 | 2.97% | 15.48% | 9.87% | 20.30% |
| 1994 | 3.91% | -7.18% | 1.29% | -3.34% |
| 1995 | 5.58% | 31.67% | 37.71% | 33.21% |
| 1996 | 5.50% | -0.81% | 23.07% | 16.50% |
| 1997 | 5.32% | 15.08% | 33.17% | 22.36% |
| 1998 | 5.11% | 13.52% | 28.58% | -2.55% |
| 1999 | 4.80% | -8.74% | 21.04% | 21.26% |
| 50-year average | 5.226% | 5.936% | 14.890% | 17.103% |
| Standard Deviation | 2.980% | 9.493% | 16.695% | 29.043% |
| Note: Sources for annual returns are the Center for Research on Security Prices, Standard &Poor's 500 index, Russell 2000 index, and Solomon-Smith Barney U.S. Treasury bill index. | ||||
Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type.
What is the standard deviation of U.S. Treasury bills for 1985 to 19941985 to 1994? (Round to three decimal places.)
What is the standard deviation of long-term government bonds for 1985 to 19941985 to 1994? (Round to three decimal places.)
What is the standard deviation of large-company stocks for 1985 to 19941985 to 1994? (Round to three decimal places.)
Which investment had the highest variance from 1985 to 19941985 to 1994? Select one)
A. U.S. Treasury billsU.S. Treasury bills
B.Long dash term government bondLong-term government bond
C.Large dash company stocksLarge-company stocks
Which investment had the lowest variance from 1985 to 19941985 to 1994? (Select one)
A. U.S. Treasury billsU.S. Treasury bills
B. Long dash term government bondLong-term government bond
C. Large dash company stocksLarge-company stocks
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Principles Of Commodity Economics And Finance
Authors: Daniel P. Ahn
1st Edition
0262038374, 9780262038379
