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TABLE 5.3 Risk and return of investments in major asset classes, 1927-2018 Average Risk premium Standard deviation max min T-bills 3.38 na 3.12 14.71,0

TABLE 5.3 Risk and return of investments in major asset classes, 1927-2018 Average Risk premium Standard Required: Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index

TABLE 5.3 Risk and return of investments in major asset classes, 1927-2018 Average Risk premium Standard deviation max min T-bills 3.38 na 3.12 14.71,0 -0.02 T-bonds 5.83 12.45 11.59 41.68 -25.96 Stocks 11.72 8.34 20.05 $7.35 -44.04 Required: Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk free interest rate is 5.2% ? ( Round your answer to 2 decimal places.) Expected annual HPR Check m

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