Question
Utilizing the data in the attached files calculate: 1. the risk premiums on the TSX and on long term government bonds in each of the
Utilizing the data in the attached files calculate:
1. the risk premiums on the TSX and on long term government bonds in each of the years.
2. what were the average risk premiums for the TSX and long term government bonds
3. calculate the standard deviation of each risk premium.
4. calculate the average rate of return and standard deviation of returns for the TSX, government bonds and Treasury bills between 2010 and 2014.
5. form a portfolio with one third in each of the three classes and calculate its average rate of return and standard deviation. Is there any benefit to diversification?
Comment on these standard deviations
Year | TSXReturn | T Bill Return | Government Long Bond Return |
2010 | 0.2215 | 0.0064 | 0.0317 |
2011 | -0.0812 | 0.0093 | 0.0276 |
2012 | 0.0187 | 0.0096 | 0.0183 |
2013 | 0.0796 | 0.0097 | 0.0227 |
2014 | 0.0715 | 0.0092 | 0.0218 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started