which of the following is correct regarding the historical returns for the period 1926-2022? 1. tresurary bills yielded a higer rate of return than long term governemnt bonds. 2.the inflation rate exceeded the rate of return on treasury bills than some years. 3. small company stocks outperformed large company stocks every year during the period. 4. bond prices in general were more volitile than stock prices 5. large company stocks outperformed small company stocks
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Given the information found in the table below, the historical risk premium for small company stocks is ____%, and the current expected rate of return for small company stocks is ____%. Assume that U.S. Treasury Bills are currently yielding a 1.4% rate of return. Historical Returns and Standard Deviations. 1926-2019 Series Average Annual Return Standard Deviation Large-company stocks 13.8% 24.2% Small-company stocks 18.5% 37.3% Long-term corporate bonds 4.4% 10.3% Long-term government bonds 3.1% 8.7% U.S. Treasury bills 2.6% 2.9% 18.5%; 19.9% 15.9%; 18.5% 18.5%; 21.1% 15.9%; 17.3% None of the above are correct.
Madhur L.
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large Company US Treasury Bill 1 3.98% 4.56% 2 14.33 4.92 3 19.17 3.84 4 –14.51 6.98 5 –32.00 5.22 6 37.41 5.36 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. c-1 Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period? c-2. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period?
Akash M.
Consider the following table for different assets for 1926 through 2020: Series Large-company stocks Small-company stocks Long-term corporate bonds Long-term government bonds Intermediate-term government bonds U.S. Treasury bills Inflation Average return 12.2 16.2 6.5 6.1 5.3 3.3 2.9 Standard Deviation 19.7 31.3 58 9.8 5.6 3.1 4.0 a. What range of returns would you expect to see 68 percent of the time for large-company stocks? Note: A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g. 32.16. b. What about 95 percent of the time? Note: A negative answer should be indicated by a minus sign. Enter your answers from lowest to highest. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.
Adi S.
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