U.S. Consumer Large- U.S. Treasury Price Bonds Bills Year Stocks Bonds Bills Index 1926 13.75% 5.69%% 3.30% -1.12% 1970 18.92 6.50 5.57 1927 35.70 3.15 -2.20 14.30 1928 45.08 1.15 4.05 -1.10 1972 18.99 1.23 3.41 1929 4.47 1973 -14.69 7.29 A71 1930 4.47 2.27 1974 -20.47 4.00 7.09 12.34 -2.15 1.15 37.23 3.94 1832 8.51 .68 -10.27 1970 23.03 15.50 5.07 1933 1.92 .52 1977 5.45 7.59 .27 1.52 1978 704 1935 46.79 .17 2.99 1979 18.61 10.58 13.29 1930 32 49 5.13 1980 32.50 12.10 12.52 1937 1.44 .27 2.80 1981 14.00 8.92 1939 31.63 4,21 06 1982 21.55 44.28 10 94 1839 -1.43 3.81 .04 1983 22.50 8.90 3.79 1940 -10.36 .04 1984 15.29 9.90 .AT .14 9.93 31.73 32.27 7.71 3.80 1942 20.75 18.67 6.09 2.01 4.43 1944 19.49 2.27 .38 0.94 36 21 .38 1909 31.60 18.54 8.44 4.65 1940 .38 18.13 1990 7.09 1947 5.05 .62 8.84 30.46 19.36 5.43 1948 4.09 2.00 1.00 2.80 7.34 3.48 17_81 1.12 10.08 13.06 3.03 1.22 5.93 -7.32 439 2.67 1951 1.50 37.58 25.94 18.39 2.43 1.75 1996 22.93 5.14 1953 -1.07 2.28 1.87 .75 1997 33.30 12.02 5.19 1.70 1954 52 23 .93 1998 20.50 4.BE 1.61 1855 31.02 .37 1999 21.04 -7.51 4.80 6.91 -1.72 2.60 2.99 2000 17.22 5.90 3.39 1957 0.82 3.28 2.90 -11.80 5.51 3.33 43.57 -1.72 1.71 1.70 2002 15.15 1.01 12 01 -2.02 3.48 1.73 2003 20.89 2.01 1.88 1900 11.21 2.81 2004 10.88 3.12 1.14 1961 26.84 67 2005 4,91 2.79 5.72 2.82 1.33 15.79 4.97 2.54 1963 22 70 3.25 1.64 2007 5.49 10.85 4.08 1804 16.43 3.71 3.02 .87 -37.00 41.78 1.24 .09 1905 12.38 93 4.00 1.82 20.40 1968 -10.06 5,12 4.94 3.46 2010 15.08 7.73 1907 2011 2.11 35.75 1969 5.49 2012 16.00 1.80 1.74 20131. Use the data in Table 12.1 to answer the following. Assume you are creating portfolios at the start of 2005 and then selling them at the end of 2010 (i.e. they will be held for six years). Calculate the arithmetic and geometric average returns for each of the following three portfolios. Assuming you started with $1,000 in each portfolio, what will the final value of each portfolio be? (Ignore any taxes.) A. 100% in large company stocks B. 100% in long term government bonds C. 60% in large company stocks & 40% in long term government bonds