Problem 11-1 Stock Market History (L01) Use the data in the tables below to answer the following questions: Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2020. Average Annual Rate of Return (8) Average Premium (Extra return versus Treasury bills) (%) Portfolio Treasury bills Treasury bonds Common stocks 3.7 5.4 11.5 Standard deviation of returns, 1900-2020. Portfolio Treasury bills Long-term government bonds Common stocks Standard Deviation (%) 2.8 8.9 19.5 1.7 7.8
Problem 11-1 Stock Market History (L01) Use the data in the tables below to answer the following questions: Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2020. Average Annual Rate of Return (8) Average Premium (Extra return versus Treasury bills) (%) Portfolio Treasury bills Treasury bonds Common stocks 3.7 5.4 11.5 Standard deviation of returns, 1900-2020. Portfolio Treasury bills Long-term government bonds Common stocks Standard Deviation (%) 2.8 8.9 19.5 1.7 7.8
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Problem 11-1 Stock Market History (L01)
Use the data in the tables below to answer the following questions:
Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2020.
Average Annual
Rate of Return
Average Premium (Extra
return versus Treasury
bills) (%)
Portfolio
Treasury bills
Treasury bonds
Common stocks
Standard deviation of returns, 1900-2020.
Portfolio
Treasury bills
Long-term government bonds
Common stocks
3.7
5.4
11.5
Standard
Deviation (%)
a. Average rate of return
b. Average risk premium
c. Standard deviation of returns
2.8
8.9
19.5
a. What was the average rate of return on large U.S. common stocks from 1900 to 2020?
b. What was the average risk premium on large stocks?
c. What was the standard deviation of returns on common stocks?
1.7
7.8
Note: Enter your answer as a percent rounded to 1 decimal place.
%
%
%
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