Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the S&P 500 stock portfolio if the current risk-free interest rate is 4.1%? (Round your answer to 2 decir Expected annual HPR 13.34 % References eBook & Resources Worksheet Learning Objective: 05-03 Determine the oxpected retum and risk of portolios that are constructed by combining risky assets with risk-free investments in Treasury bills Check my work World Markets U.S. Markets Large Stocks Government Bonds Small Stocks Large U.S. Long-Term Stocks Treasuries A. Total Returns Geometric average (%) Lowest return Highest return 8.24 5.37 11.82 9.88 39.94 (1931)-13.50 (1946)-54.27 (1937) -45.56 (1931) 1382 (2009) 0.81 (1933) 34.12 (1985) 159.05 (1933) 54.56 (1933) 32.68 (1985) B. Risk (Measured Using Excess Returns Standard deviation Value at risk (VaR) 5% 8.89 -25.88 8.44 -10.67 37.29 48.33 20.52 -31.96 -11.51 C. Deviation from Normality VaR assuming normality Actual VaR minus normal Skew Kurtosis -10.43 -0.24 0.68 139 -10.23 -22.54 -3.34 -36.96 -11.37 0.83 1.97 23.51 -8.46 0.31 -0.05 0.39 0.53 1.08 D. Returns in Excess of one-Month T-Bill Rates 6.32 201 13.94 3.97 8.34 2.19 1.83 0.85 2.16 Average excess return Standard error 0.90 E. Sharpe Ratios for 1926-2013 and Three Subperiods Entire period Q 1926-1955 956-1985 1986-2013 0.23 0.59 0.33 0.43 0.19 0.35 0.26 0.22 0.05 0.52 0.37 0.40 0.38 0.46 0.28 0.48 F. Correlations of Excess Returns -0.06 -0.27 -0.16 0.02 -0.22 -0.13 With inflation With T-bill rates -0.12 0.25 Note: Coloeed eatries indicate measures of rail risk that exceed values consistent with a mormal distrilbution Sources: World pontfilio of Equities: 1926-1969 Simson, Manh and Staunos Equisy Preia Around the Woddi, 1970-3013 Blooaberg-MSCI Wodld in USs. Wold boads 1926-1987 Dinson, Manh, pd Saos Ghsd), 1988-2013 Bloomberg: Barclay's Global Ta in USS Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the S&P 500 stock portfolio if the current risk-free interest rate is 4.1%? (Round your answer to 2 decir Expected annual HPR 13.34 % References eBook & Resources Worksheet Learning Objective: 05-03 Determine the oxpected retum and risk of portolios that are constructed by combining risky assets with risk-free investments in Treasury bills Check my work World Markets U.S. Markets Large Stocks Government Bonds Small Stocks Large U.S. Long-Term Stocks Treasuries A. Total Returns Geometric average (%) Lowest return Highest return 8.24 5.37 11.82 9.88 39.94 (1931)-13.50 (1946)-54.27 (1937) -45.56 (1931) 1382 (2009) 0.81 (1933) 34.12 (1985) 159.05 (1933) 54.56 (1933) 32.68 (1985) B. Risk (Measured Using Excess Returns Standard deviation Value at risk (VaR) 5% 8.89 -25.88 8.44 -10.67 37.29 48.33 20.52 -31.96 -11.51 C. Deviation from Normality VaR assuming normality Actual VaR minus normal Skew Kurtosis -10.43 -0.24 0.68 139 -10.23 -22.54 -3.34 -36.96 -11.37 0.83 1.97 23.51 -8.46 0.31 -0.05 0.39 0.53 1.08 D. Returns in Excess of one-Month T-Bill Rates 6.32 201 13.94 3.97 8.34 2.19 1.83 0.85 2.16 Average excess return Standard error 0.90 E. Sharpe Ratios for 1926-2013 and Three Subperiods Entire period Q 1926-1955 956-1985 1986-2013 0.23 0.59 0.33 0.43 0.19 0.35 0.26 0.22 0.05 0.52 0.37 0.40 0.38 0.46 0.28 0.48 F. Correlations of Excess Returns -0.06 -0.27 -0.16 0.02 -0.22 -0.13 With inflation With T-bill rates -0.12 0.25 Note: Coloeed eatries indicate measures of rail risk that exceed values consistent with a mormal distrilbution Sources: World pontfilio of Equities: 1926-1969 Simson, Manh and Staunos Equisy Preia Around the Woddi, 1970-3013 Blooaberg-MSCI Wodld in USs. Wold boads 1926-1987 Dinson, Manh, pd Saos Ghsd), 1988-2013 Bloomberg: Barclay's Global Ta in USS