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  1. business
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  3. consider historical data showing that the average

Consider historical data showing that the average annual rate of return on the S&P 500...

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Accounting

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Consider historical data showing that the average annual rate of return on the S&P 500 portfolio over the past 85 years has averaged roughly 8% more than the Treasury bill return and that the S&P 500 standard deviation has been about 22% per year. Assume these values are representative of investors' expectations for future performance and that the current T-bill rate is 3%. Calculate the expected return and variance of portfolios invested in T-bills and the S&P 500 index with weights as shown below. (Enter your answers as decimals rounded to 4 places. Leave no cells blank - be certain to enter "0" wherever required.) WBills Windex Expected Return 0.1100 Variance 0.0484 Example 0.0 1.0 0.2 0.8 0.4 0.6 0.4 0.6 0.8 0.2 1.0 0.0

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