Ef 355. Required:Using Table 5.3 as your guide, what is your estimate of the expected annual HPRon the market index stock portfolio if the current risk-free interest rate is 3%?(Round your answer to 2 decimal places.)8Expected annual HPRTABLE 5.3 Risk and return of investments in major asset classes,1927-2018AverageRisk premiumStandard deviationmaxminT-bills3.38%na3.1214.71-0.02T-bonds5.832.4511.5941.68-25.96Stocks11.728.3420.0557.35-44.04

Expected holding period returnThe return an investor receives over and above the risk-free rate is…

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 3%? (Round your answer to 2 decimal places.) Expected annual HPR %

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 3%? (Round your answer to 2 decimal places.) Expected annual HPR %

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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Question

Ef 355.

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 3%?
(Round your answer to 2 decimal places.)
8
Expected annual HPR
TABLE 5.3 Risk and return of investments in major asset classes,
1927-2018
Average
Risk premium
Standard deviation
max
min
T-bills
3.38
%
na
3.12
14.71
-0.02
T-bonds
5.83
2.45
11.59
41.68
-25.96
Stocks
11.72
8.34
20.05
57.35
-44.04

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