Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk- free interest rate is 4.7% ? (Round your answer to 2 decimal places.) Expected annual HPR %

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk-
free interest rate is 4.7%? (Round your answer to 2 decimal places.)
Expected annual HPR
%
Transcribed Image Text:Required: Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk- free interest rate is 4.7%? (Round your answer to 2 decimal places.) Expected annual HPR %
TABLE 5.3 Risk and return of investments in major asset classes, 1927-2018
T-bills
T-bonds
Stocks
Average
3.38
5.83
11.72
Risk premium
na
2.45
8.34
Standard deviation
3.12
11.59
20.05
max
14.71
41.68
57.35
min
-0.02
-25.96
-44.04
Transcribed Image Text:TABLE 5.3 Risk and return of investments in major asset classes, 1927-2018 T-bills T-bonds Stocks Average 3.38 5.83 11.72 Risk premium na 2.45 8.34 Standard deviation 3.12 11.59 20.05 max 14.71 41.68 57.35 min -0.02 -25.96 -44.04
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