The following table contains the historic returns from large stocks and long-term Treasury bonds over the last 20 years. Analyze the risk-return trade-off that would have characterized these portfolios.

Year	Large Stock	Long-Term T-Bonds	T-Bills
1989	31.34	19.49	8.38
1990	3.20	7.13	7.84
1991	30.66	18.39	5.60
1992	7.71	7.79	3.50
1993	9.87	15.48	2.90
1994	1.29	7.18	3.91
1995	37.71	31.67	5.60
1996	23.07	0.81	5.20
1997	33.17	15.08	5.25
1998	28.58	13.52	4.85
1999	21.04	8.74	4.69
2000	9.10	20.27	5.88
2001	11.89	4.21	3.86
2002	22.10	16.79	1.63
2003	28.69	2.38	1.02
2004	10.88	7.71	1.19
2005	4.91	6.50	2.98
2006	11.78	1.21	4.81
2007	3.53	10.25	4.67
2008	38.49	1.34	1.55

a.	Calculate the average rate of return and standard deviation of the "Excess returns" after a continuous compounding transformation was performed.(Round your answers to 2 decimal places.)

	Large Stock	Long Term T-Bonds
Average rate of return	%	%
Standard deviation	%	%

b.	What was the correlation coefficient of their annual returns? (Round your answer to 2 decimal places.)

Correlation coefficient

c.	What would have been the average return and standard deviation of portfolios with differing weights in the two assets? For example, consider weights in stocks starting at zero and incrementing by .10 up to a weight of 1.0. (Round your answers to 2 decimal places.)

Weights in		Portfolio
Stocks	Bonds	Mean	Standard deviation
0.0	1	%	%
0.1	0.9	%	%
0.2	0.8	%	%
0.3	0.7	%	%
0.4	0.6	%	%
0.5	0.5	%	%
0.6	0.4	%	%
0.7	0.3	%	%
0.8	0.2	%	%
0.9	0.1	%	%
0.10	0	%	%

d.	What was the average return and standard deviation of the minimum-variance combination of stocks and bonds? (Round your answers to 2 decimal places.)

	Weights in		Portfolio
	Stocks	Bonds	Mean	Standard deviation
Minimum-Variance	0.1338	0.8662	%	%