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Suppose you have the following data Nominal Real Risk Pre. Std Dev 29 15.4% Small Stocks 17 6 Large 11.9% Stocks Corp 4.9% Bonds Long
Suppose you have the following data Nominal Real Risk Pre. Std Dev 29 15.4% Small Stocks 17 6 Large 11.9% Stocks Corp 4.9% Bonds Long UST 4.2% Short UST 1.4% Inflation 2.2% 5 4 Answer the Following 1. Fill in the table (ignore cells with dashes) 2. What is the likelihood that the return to small stocks will be above 44.4% 3. What is the likelihood that the return to large stocks will be below 45.9% 4. What is the likelihood that the return to corporate bonds will be above -7.1% 5. What is the likelihood that the return to short-term treasuries will be above 9.4% 6. What is the real rate of return and which asset class has the highest real return 7. What is the risk premium and which asset class has the lowest risk premium
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