Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 20171950 to 2017 Average1950 to 19591960 to 19691970 to 1979AverageAverageAverage1980 to 1989Average1990 to 1999Average2000 to 2009Average2010 Annual Return2011 Annual Return2012 Annual Return2013 Annual Return2014 Annual Return2015 Annual Return2016 Annual Return2017 Annual Return2010 to 2017 AverageStocks12.7%20.98.77.518.219.00.915.12.116.032.413.71.412.021.814.3Long-Term TreasuryBonds6.6%0.01.65.713.59.58.09.429.93.6-12.725.1-1.21.28.48.0T-bills4.30%2.004.006.308.904.902.700.010.020.020.070.050.210.511.390.29You have a portfolio with an asset allocation of 50 percent stocks, 32 percent long-term Treasury bonds, and 18 percent T-bills. Usethese weights and the returns given in the above table to compute the return of the portfolio in the year 2010 and each year since.Then compute the average annual return and standard deviation of the portfolio. (Do not round intermediate calculations. Roundyour answers to 2 decimal places.)

The expected average return on the portfolio can be found by looking at the portfolio for each year…

Answered: Annual and Average Returns for Stocks,…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 7P

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Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2015 Stocks Long-Term Treasury Bonds T-bills 1950 to 2015 Average 12.6 % 6.6 % 4.40 % 1950 to 1959 Average 20.9 0.0 2.00 1960 to 1969 Average 8.7 1.6 4.00 1970 to 1979 Average 7.5 5.7 6.30 1980 to 1989 Average 18.2 13.5 8.90 1990 to 1999 Average 19.0 9.5 4.90 2000 to 2009 Average 0.9 8.0 2.70 2010 Annual Return 15.1 9.4 0.01 2011 Annual Return 2.1 29.9 0.02 2012 Annual Return 16.0 3.6 0.02 2013 Annual Return 32.4 −12.7 0.07 2014 Annual Return 13.7 25.1 0.05 2015 Annual Return 1.4 −1.2 0.21 2010 to 2015 Average 13.4 9.0 0.06 You have a portfolio with an asset allocation of 50 percent stocks, 40 percent long-term Treasury bonds, and 10 percent T-bills. Use these weights and the returns…
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average nominal return earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real risk premium earned on large-company stocks using the approximate Fisher equation. (Enter percentages as decimals and round to 4 decimals)
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2013 35.90 0.21 2014 15.20 0.21 2015 -5.10 0.21 2016 16.90 0.08 2017 25.90 0.10 a. What was the risk premium on common stock in each year? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Year Risk Premium 2013 % 2014 % 2015 % 2016 % 2017 % b. What was the average risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
The table below lists the annual return on stock W between 2015 and 2019. Year 2015 2016 2017 2018 2019 Annual Return 12% -10% 20% -4% -8% The annual realized compounded return on stock W between 2015 and 2019 is closest to _____. A. 1.33% B. 2.33% C. 2% D. 3%
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real return earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)
Roundall dollar answers to 2 decimal places and record all interest rate, coupon rate and growth rate answers as a percentrounded to one decimal place. 26. The historical stock returns for GAF, Inc. are listed below: Year -Annual Stock Return2013 -12%2014 14%2015 35%2016 2%2017 -16%2018 8%2019 0%2020 34%2021 12%2022 6% What is the standard deviation of returns for GAF, Inc. stock over the 10-year time period? (Compute the standard deviation assuming this is a population of returns, not a sample – that is, use the procedure describedin the textbook for calculating the standard deviation of a series of stock returns).27. The end of year stock price and the dividend paid each year for Maxwell, Inc. stock for years 0 through 6 arelisted in the table below: Year -End of Year Stock Price- Dividend0 $12.00 $ 01 $14.86 $1.802 $7.95 $1.883 $8.00…
Observe the mean, the standard deviation, and the CV of the annual rate of return of the portfolio. Tesla Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2020 289.9971 86.0520 705.6700 72.2440 705.6700 743.44% 2019 54.7060 62.0240 86.1880 35.7940 83.6660 25.70% 2018 63.4620 64.1060 75.9140 50.1120 66.5600 6.89% 2017 62.8633 43.3980 77.0000 43.3980 62.2700 45.70% 2016 41.9535 44.6820 53.0840 28.7340 42.7380 -10.97% 2015 46.0085 43.8620 56.4520 37.0000 48.0020 7.91% 2014 44.6658 30.0200 57.2080 27.8680 44.4820 47.85% 2013 20.8803 7.0720 38.6740 6.5820 30.0858 344.14% 2012 6.2337 5.6160 7.6020 4.5580 6.7740 18.59% 2011 5.3609 5.3240 6.9880 4.3660 5.7120 7.25% 2010 4.6683 4.7780 7.0940 3.1600 5.3260 0.00% Amazon Historical Annual Stock Price Data Year Average Stock Price Year Open Year High Year Low Year Close Annual % Change 2021 3315.9774 3186.6300 3731.4100 2951.9500…
Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2019 You have a portfolio with an asset allocation of 50 percent stocks, 34 percent long-term Treasury bonds, and 16 percent T-bills. Use these weights and the returns given in the above table to compute the return of the portfolio in the year 2010 and each year since. Then compute the average annual return and standard devlation of the portfolio. Note: Do not round intermediate calculations. Round your answers to 2 decimal places.
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Required: What was the risk premium on common stock in each year? What was the average risk premium? What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)-- expressed in % (NOTE: 11.31% & 13.68% is incorrect)
The realized return of Talkie share and Stock M for the past 5 years are detailed below:Year Talkie Stock M2020 15% 30%2019 5% 7%2018 -5% -3%2017 2% -8%2016 9% 20% Compute the arithmetic mean and standard deviation of returns over the past 5 years for each stock?
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Required: What was the risk premium on common stock in each year? What was the average risk premium? What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)

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