Variance and standard deviation.Calculate the variance and the standard deviation of U.S. Treasury bills, long-term government bonds, and small-company stocks for 1950 to 1959, 1960 to 1969, 1970 to 1979, and 1980 to 1989 from Table 8.1. Which had the highest variance? Which had the lowest variance? Click on the Spreadsheet Learning Aid to see Table 8.1long dash Year-by-Year Returns, 1950-1999. Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. What is the variance of U.S. Treasury bills for 1950 to 1959, 1960 to 1969, 1970 to 1979, and 1980 to 1989? The variance of U.S. Treasury bills for 1950 to 1959 is nothing %. (Round to five decimal places.)

L 221 Table 8.1 Year-by-Year Returns and Decade Averages, 19501999 + Year Three-Month U.S. Long-Term Government Bonds Large-Company Stocks Small-Company Stocks Treasury Bills 1950 1.20% -0.96% 32.68% 48.45% 1951 1.49% -1.95% 23.47% 9.41% 1952 1.66% 1.93% 18.91% 6.36% 1953 1.82% 3.83% -1.74% -5.66% 1954 0.86% 4.88% 52.55% 65.13% 1955 1.57% -1.34% 31.44% 21.84% 1956 2.46% -5.12% 6.45% 3.82% 1957 3.14% 9.46% -11.14% -15.03% 1958 1.54% -3.71% 43.78% 70.63% 1959 2.95% -3.55% 12.95% 17.82% 1950s average 1.87% 0.35% 20.94% 22.28% return L 221 1960 2.66% 13.78% 0.19% -5.16% + 1961 2.13% 0.19% 27.63% 30.48% 1962 2.72% 6.81% -8.79% -16.41% 1963 3.12% -0.49% 22.63% 12.20% 1964 3.54% 4.51% 16.67% 18.75% 1965 3.94% -0.27% 12.50% 37.67% 1966 4.77% 3.70% - 10.25% -8.08% 1967 4.24% -7.41% 24.11% 103.39% 1968 5.24% -1.20% 11.00% 50.61% 1969 6.59% -6.52% -8.33% -32.27% 1960s average 3.90% 1.31% 8.74% 19.12% return 1970 6.50% 12.69% 4.10% -16.54% 1971 4.34% 17.47% 14.17% 18.44% 1972 3.81% 5.55% 19.14% -0.62% 221 1973 6.91% 1.40% -14.75% -40.54% + 1974 7.93% 5.53% -26.40% -29.74% 1975 5.80% 8.50% 37.26% 69.54% 1976 5.06% 11.07% 23.98% 54.81% 1977 5.10% 0.90% -7.26% 22.02% 1978 7.15% -4.16% 6.50% 22.29% 1979 10.45% 9.02% 18.77% 43.99% 1970s average 6.31% 6.80% 7.55% 14.37% return 1980 11.57% 13.17% 32.48% 35.34% 1981 14.95% 3.61% -4.98% 7.79% 1982 10.71% 6.52% 22.09% 27.44% 1983 8.85% -0.53% 22.37% 34.49% 1984 10.02% 15.29% 6.46% -14.02% 1985 7.83% 32.68% 32.00% 28.21% 1986 6.18% 23.96% 18.40% 3.40% 221 + 1987 5.50% -2.65% 5.34% -13.95% 1988 6.44% 8.40% 16.86% 21.72% 1989 8.32% 19.49% 31.34% 8.37% 1980s average 9.04% 11.99% 18.24% 13.88% return 1990 7.86% 7.13% -3.20% -27.08% 1991 5.65% 18.39% 30.66% 50.24% 1992 3.54% 7.79% 7.71% 27.84% 1993 2.97% 15.48% 9.87% 20.30% 1994 3.91% -7.18% 1.29% -3.34% 1995 5.58% 31.67% 37.71% 33.21% 1996 5.50% -0.81% 23.07% 16.50% 1997 5.32% 15.08% 33.17% 22.36% 1998 5.11% 13.52% 28.58% -2.55% 221 + 1996 5.50% -0.81% 23.07% 16.50% 1997 5.32% 15.08% 33.17% 22.36% 1998 5.11% 13.52% 28.58% -2.55% 1999 4.80% -8.74% 21.04% 21.26% 1990s average 5.02% 9.23% 18.99% 15.87% return 50-year average 5.23% 5.94% 14.89% 17.10% return Standard deviation 2.98% 9.49% 16.70% 29.04% Note: Sources for annual returns are the Center for Research on Security Prices, the Standard & Poor's 500 Index, the Russell 2000 Index, and the Salomon Smith Barney U.S. Treasury Bill Index. L 221 Table 8.1 Year-by-Year Returns and Decade Averages, 19501999 + Year Three-Month U.S. Long-Term Government Bonds Large-Company Stocks Small-Company Stocks Treasury Bills 1950 1.20% -0.96% 32.68% 48.45% 1951 1.49% -1.95% 23.47% 9.41% 1952 1.66% 1.93% 18.91% 6.36% 1953 1.82% 3.83% -1.74% -5.66% 1954 0.86% 4.88% 52.55% 65.13% 1955 1.57% -1.34% 31.44% 21.84% 1956 2.46% -5.12% 6.45% 3.82% 1957 3.14% 9.46% -11.14% -15.03% 1958 1.54% -3.71% 43.78% 70.63% 1959 2.95% -3.55% 12.95% 17.82% 1950s average 1.87% 0.35% 20.94% 22.28% return L 221 1960 2.66% 13.78% 0.19% -5.16% + 1961 2.13% 0.19% 27.63% 30.48% 1962 2.72% 6.81% -8.79% -16.41% 1963 3.12% -0.49% 22.63% 12.20% 1964 3.54% 4.51% 16.67% 18.75% 1965 3.94% -0.27% 12.50% 37.67% 1966 4.77% 3.70% - 10.25% -8.08% 1967 4.24% -7.41% 24.11% 103.39% 1968 5.24% -1.20% 11.00% 50.61% 1969 6.59% -6.52% -8.33% -32.27% 1960s average 3.90% 1.31% 8.74% 19.12% return 1970 6.50% 12.69% 4.10% -16.54% 1971 4.34% 17.47% 14.17% 18.44% 1972 3.81% 5.55% 19.14% -0.62% 221 1973 6.91% 1.40% -14.75% -40.54% + 1974 7.93% 5.53% -26.40% -29.74% 1975 5.80% 8.50% 37.26% 69.54% 1976 5.06% 11.07% 23.98% 54.81% 1977 5.10% 0.90% -7.26% 22.02% 1978 7.15% -4.16% 6.50% 22.29% 1979 10.45% 9.02% 18.77% 43.99% 1970s average 6.31% 6.80% 7.55% 14.37% return 1980 11.57% 13.17% 32.48% 35.34% 1981 14.95% 3.61% -4.98% 7.79% 1982 10.71% 6.52% 22.09% 27.44% 1983 8.85% -0.53% 22.37% 34.49% 1984 10.02% 15.29% 6.46% -14.02% 1985 7.83% 32.68% 32.00% 28.21% 1986 6.18% 23.96% 18.40% 3.40% 221 + 1987 5.50% -2.65% 5.34% -13.95% 1988 6.44% 8.40% 16.86% 21.72% 1989 8.32% 19.49% 31.34% 8.37% 1980s average 9.04% 11.99% 18.24% 13.88% return 1990 7.86% 7.13% -3.20% -27.08% 1991 5.65% 18.39% 30.66% 50.24% 1992 3.54% 7.79% 7.71% 27.84% 1993 2.97% 15.48% 9.87% 20.30% 1994 3.91% -7.18% 1.29% -3.34% 1995 5.58% 31.67% 37.71% 33.21% 1996 5.50% -0.81% 23.07% 16.50% 1997 5.32% 15.08% 33.17% 22.36% 1998 5.11% 13.52% 28.58% -2.55% 221 + 1996 5.50% -0.81% 23.07% 16.50% 1997 5.32% 15.08% 33.17% 22.36% 1998 5.11% 13.52% 28.58% -2.55% 1999 4.80% -8.74% 21.04% 21.26% 1990s average 5.02% 9.23% 18.99% 15.87% return 50-year average 5.23% 5.94% 14.89% 17.10% return Standard deviation 2.98% 9.49% 16.70% 29.04% Note: Sources for annual returns are the Center for Research on Security Prices, the Standard & Poor's 500 Index, the Russell 2000 Index, and the Salomon Smith Barney U.S. Treasury Bill Index