Question

The following data are the returns for 1980 through 1986 on five types of capital-market instruments:...

The following data are the returns for 1980 through 1986 on five types of capital-market instruments: common stocks, small-capitilzation stocks, long-term corporate bonds, long-term U.S. government bonds, and U.S. Treasury Bills.  You may wish to use a spreadsheet program to make your calculations.

Year

Common Stock

Small Stocks

Long-term Corporate Bonds

Long-term Government Bonds

U.S. Treasury Bills

1980

0.3242

0.3988

-0.0262

-0.0395

0.1124

1981

-0.0491

0.1388

-0.0096

0.0185

0.1471

1982

0.2141

0.2801

0.4379

0.4035

0.1054

1983

0.2251

0.3967

0.0470

0.0068

0.0880

1984

0.0627

-0.0667

0.1639

0.1543

0.0985

1985

0.3216

0.2466

0.3090

0.3097

0.0772

1986

0.1847

0.0685

0.1985

0.2444

0.0616


For the average return problems, enter your answers in percentage format (e.g. enter 12.5% as 12.50 rather than .125)

For the holding period return problems, enter your answers as percentage values; in other words, convert your decimal format of holding period return to percentage return format (e.g. a formula result of 2.25 should be converted to 225%)

For the expected return problems, enter your answers as percentage values (e.g. enter 7.50% as 7.50 and not as 0.075)

  1. What was the average return during the period for all Common Stocks?

  1. Calculate the average return for Small Company Stocks.

  1. What was the average return during the period for Long Term Corporate Bonds?

  1. What was the average return during the period for Long Term Government Bonds?

  1. What was the average return during the period for US Treasury Bills?

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