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 4.5%? (Round your answer to 2 decimal places.)

Expected annual HPR %

TABLE 5.3 Statistics for asset class Index portfolio s, 1926-2013 (annual rates In U.S. dollars, 3) World U.S. Markets Large US. Long-Term Large Government Small Stocks Bonds Stocks Stocks Treasuries A. Total Returns Geometric average 8.24 5.37 82 9.88 3994 (193 3.50 (1946) 54.27 (1937 -4556 (1931) -13.82 (2009) 34.12 (1985) 54.56 1933) 32.68 (1985 Highest return 933 B. Risk (Measured using Excess Returns 8.89 8.44 37.29 20.52 8.0 Standard deviati 25,88 48,33 31.96 value at risk VaR) 5 C. Deviation from Normality" VaR assuming normality 22.54 0.43 36.96 23.5 0.23 3.34 0.24 28 VaR 0.68 0.83 0.3 0.39 Kurtosis 08 97 -0.05. 0.53 D. Return Month T-Bill R Average excess return 6.32 3.94 8.34 83 Standard error 2.0 0.90 3.97 0.85 E. Sharpe Ratios for 1926-2013 and Th period Entire period 0.33 0.23 926-1955 0.43 0.59 9s6-1985 986-2013 0.35 0.4 F. Correlations of Excess Returns 0,27 0,02 0,06 With inflation With T-bill rates 0.25 0.22 indicate mearuann ounces Wed of Equities 19% 1969 Manh Saaroa Equiry Preunia Around 1970-2013 B Staunton bid, 1988-2013Blomberg Barclay GlobalT World bond 1926-1 Dima USS Lowest Quantile Large Ce Price (CRSP S&P 00: Loeg Team Trammy bond Bloomberg ay US Long-Term Treamry indexi Data Library, Statistic qiu