Year Three-Month U.S.Treasury Bills Long-Term Government Bonds Large Company Stocks Small Company Stocks 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% 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% 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% 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% 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% 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% 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% 1999 4.80% -8.74% 21.04% 21.26% 50-year average 5.226% 5.936% 14.890% 17.103% Standard Deviation 2.980% 9.493% 16.695% 29.043%

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 Leaming Aid to see Table 8.1-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 affer each answer box, only apply for the answers you will type