Use the data shown in the following table: a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression). b. Compute the variance and standard deviation for each of the assets from 1929 to 1940. c. Which asset was the riskiest during the Great Depression? How does that fit with your intuition? Note: For all your answers type decimal equivalents.
Use the data shown in the following table: a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression). b. Compute the variance and standard deviation for each of the assets from 1929 to 1940. c. Which asset was the riskiest during the Great Depression? How does that fit with your intuition? Note: For all your answers type decimal equivalents.
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
Transcribed Image Text:Use the data shown in the following table:
K
a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression).
b. Compute the variance and standard deviation for each of the assets from 1929 to 1940.
c. Which asset was the riskiest during the Great Depression? How does that fit with your intuition?
Note: For all your answers type decimal equivalents.
Data table
Year
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
S&P 500
-0.08906
-0.25256
- 0.43861
-0.08854
0.52880
-0.02341
0.47221
0.32796
-0.35258
0.33204
-0.00914
- 0.10078
Small Stocks
- 0.43081
-0.44698
-0.54676
-0.00471
2.16138
0.57195
0.69112
0.70023
- 0.56131
0.08928
0.04327
-0.28063
Corp. Bonds
0.04320
0.06343
-0.02380
0.12199
0.05255
0.09728
0.06860
0.06219
0.02546
0.04357
0.04247
0.04512
World Portfolio
-0.07692
-0.22574
-0.39305
0.03030
0.66449
0.02552
0.22782
0.19283
-0.16950
0.05614
-0.01441
0.03528
Treasury Bills
0.04471
0.02266
0.01153
0.00882
0.00516
0.00265
0.00171
0.00173
0.00267
0.00060
0.00042
0.00037
CPI
0.00585
- 0.06395
- 0.09317
-0.10274
0.00763
0.01515
0.02985
0.01449
0.02857
-0.02778
0.00000
0.00714
X
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Step 1: Compute the average return for each of the assets from 1929 to 1940
VIEWStep 2: b. Compute the variance and standard deviation for each of the assets from 1929 to 1940.
VIEWStep 3: c. Which asset was the riskiest during the Great Depression? How does that fit with your intuition?
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