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The following table contains the historic returns from a portfolio consisting of large stocks and a portfolio consisting of long - term Treasury bonds over
The following table contains the historic returns from a portfolio consisting of large stocks and a portfolio consisting
of longterm Treasury bonds over the last years. Tbills returns represent riskfree returns.
Analyze the riskreturn tradeoff that would have characterized these portfolios. The following dataset is also available in
Excel format in Module Resources on Canvas. Returns in the dataset are in percents. For example, means per year.
A Estimate the annual risk premium of large stocks and Tbonds, respectively. Round your answers to decimal places.
B Estimate the annual volatility of large stocks and longterm Tbonds, respectively. Round your answers to decimal places.
C Estimate the Sharpe ratio of large stocks and longterm Tbonds, respectively. Round your answers to decimal places.
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