Table 9.2 Average Returns for BondsLong-TermTreasury Bonds1950 to 1959Average0.0%1960 to 1969Average1.91970 to 1979Average5.71980 to 1989Average13.81990 to 1999Average9.22000 to 2009Average8.6Table 9.4 Annual Standard Deviation for BondsLong-Term TreasuryBonds1950 to 19594.9%1960 to 19696.11970 to 19796.61980 to 198915.51990 to 199912.62000 to 200910.3Use the tables above to calculate the coefficient of variation of the risk-return relationship of the bond market during each decadesince 1950.Note: Round your answers to 2 decimal places.DecadeCoV1960s1970s1980s1990s2000s

Average return for bondsStandard deviation for…

Table 9.2. Average Returns for Bonds 1958 to 1959 1968 to 1969 Average Average Average Average Average Average Table 9.4 Annual Standard Deviation for Bonds 1978 to 1979 1988 to 1989 1990 to 1999 2888 to 2889 Long-Term Treasury Bonds e.ex 1.9 5.7 13.8 9.2 8.6 1958 to 1959 1968 to 1969 1978 to 1979 1988 to 1989 Long-Term Treasury Bonds 4.9% 6.1 6.6 15.5

Table 9.2. Average Returns for Bonds 1958 to 1959 1968 to 1969 Average Average Average Average Average Average Table 9.4 Annual Standard Deviation for Bonds 1978 to 1979 1988 to 1989 1990 to 1999 2888 to 2889 Long-Term Treasury Bonds e.ex 1.9 5.7 13.8 9.2 8.6 1958 to 1959 1968 to 1969 1978 to 1979 1988 to 1989 Long-Term Treasury Bonds 4.9% 6.1 6.6 15.5

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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Consider the following information for a period of years: Long-term government bonds Long-term corporate bonds Inflation Arithmetic Mean 7.8% a. Long-term government bonds b. Long-term corporate bonds 7.9 3.5 a. What is the real return on long-term government bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What is the real return on long-term corporate bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. 4.25% %
Table 9.2 Average Returns for Bonds Long-TermTreasury Bonds 1950 to 1959 Average 0.0 % 1960 to 1969 Average 1.6 1970 to 1979 Average 5.7 1980 to 1989 Average 13.5 1990 to 1999 Average 9.5 2000 to 2009 Average 8.0 Table 9.4 Annual Standard Deviation for Bonds Long-TermTreasury Bonds 1950 to 1959 4.9 % 1960 to 1969 6.2 1970 to 1979 6.8 1980 to 1989 15.1 1990 to 1999 12.8 2000 to 2009 10.3 Use the tables above to calculate the coefficient of variation of the risk-return relationship of the bond market during each decade since the 1950s. (Round your answers to 2 decimal places.) I used copy and paste to subit this question. I have no idea how to begin to solve this problem. Please help!
Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2019 Long-Term Treasury Bonds 6.6% 0.0 1.6 5.7 13.5 9.5 8.0 9.4 1950 to 2019 Average 1950 to 1959 Average 1960 to 1969 Average Average Average Average 1970 to 1979 1980 to 1989 1990 to 1999 2000 to 2009 2010 2011 Annual Return 2012 Annual Return 2013 Annual Return 2014 Annual Return 2015 Annual Return 2016 Annual Return 2017 Annual Return 2018 Annual Return 2019 Annual Return 2010 to 2019 Average 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Average Annual Return Standard deviation Portfolio Return % % % % % % % % % % % Stocks 12.7% % 20.9 8.7 7.5 18.2 19.0 0.9 15.1 2.1 16.0 32.4 13.7 1.4 12.0 21.8 -4.4 31.5 14.2 29.9 3.6 -12.7 25.1 -1.2 You have a portfolio with an asset allocation of 50 percent stocks, 36 percent long-term Treasury bonds, and 14 percent T-bills. Use these weights and the returns given in the above table to compute the return of the portfolio in the year 2010 and each year since. Then…
Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 7.1 % Long-term corporate bonds 7.2 Inflation 4.2 a. What is the real return on long-term government bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the real return on long-term corporate bonds? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 7.6% Long-term corporate bonds 7.7 Inflation 4.6 What is the real return on long-term government bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. What is the real return on long-term corporate bonds? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
Consider the following information for a period of years: Arithmetic Mean Long-term government bonds 7.0 % Long-term corporate bonds 7.1 Inflation 4.0 What is the real return on long-term government bonds? ____%
Consider the following two Treasury securities: Bond Price Modified duration (years) A $100 6 B $80 7 For a 25 basis-point change in interest rates, what is the percentage change in price for Bond A? A. -2.00% B. -1.50% C. 3.00% D. 3.50%
The following information is about the spot rates on Treasury securities and BBB corporate bond: Spot 1 Year Spot 2 Year Spot 3 Year Treasury 3% 4.75% 5.5% BBB Corporate Debt 7.5% 9.15% 10.5% Question: Using the implied forward rates, estimate the annual marginal default probability for the one-year BBB corporate debt in year 3?
Consider the following two Treasury securities: Bond Price Modified duration (years) A $100 6 B $80 7 For a 25 basis-point change in interest rates, which bond has the greatest percentage change in price? A. Bond A B. Bond B C. Can't be determined
Using the following information, determine the default risk premium on the 10 year AA corporate bond: Rate % inflation 1.96 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.46 10y AA Corporate 7.76
Using the following information, determine the maturity risk premium on 10 year bonds: Rate % inflation 0.74 T-bill 5.00 10y T-Bond 6.00 10y AAA Corporate 6.37 10y AA Corporate 7.62
Assume that yields on U.S. Treasury securities were as follows:Term Rate6 months 4.69%1 year 5.492 years 5.663 years 5.714 years 5.895 years 6.0510 years 6.1220 years 6.6430 years 6.76 a. Plot a yield curve based on these data.b. What type of yield curve is shown?c. What information does this graph tell you?d. Based on this yield curve, if you needed to borrow money for longer than 1 year,would it make sense for you to borrow short term and renew the loan or borrow longterm? Explain.

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