T-Bills				Inflation				Real T-Bill				T-Bills				Inflation				Real T-Bill
Full sample		3.38				1.80				0.46				3.12				4.00				3.76
19271951		0.95				1.79				0.47				1.24				6.04				6.33
19522018		4.26				3.46				0.81				3.13				2.89				2.12

(1927-2018)	Market Index				Big/ Growth				Big/ Value				Small/ Growth				Small/ Value
Mean excess return (annualized)		8.29				8.07				11.69				8.99				15.38
Standard deviation (annualized)		18.52				18.35				24.70				26.06				28.21

Suppose that the inflation rate is expected to be 1.80% in the near future using the data provided above, what would be your predictions for the following?

a.The T-bill rate %

b.expectected rate of return on the big /value portfolio %

c. The risk on the stock market

10.

You have been given this probability distribution for the holding-period return for GM stock:

Stock of the Economy	Probability			HPR
Boom		0.40			30	%
Normal growth		0.40			11	%
Recession		0.20			10	%

What is the expected variance for GM stock? a.200.00% b.221.04% c.246.37% d.14.87% e.16.13