Chapter 6, Problem 15PS

You can find a spreadsheet containing annual returns on stocks end Treasury bonds in Connect. Copy the data for the last 20 years into a new spreadsheet, Analyze the risk return trade-off that would have characterized portfolios constructed from large stocks and long-term Treasury bonds over the last 20 years.
a. What was the average rate of return and standard deviation of each asset?
b. What was the correlation coefficient of their annual returns?
c. What would have been the average return and standard deviation of portfolios with differing weights in the two assets? For example. consider weights in stocks starting at mm and incrementing by .10 up to a weight of 1.
d. What was the average return and standard deviation of the minimum-variance combination of stacks and bonds? (LO 6-2)