TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks...

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TABLE 5.3 Risk and return of investments in major asset classes, 1927-2016 T-bills T-bonds Stocks Arithmetic average 3.42 5.51 11.91 Risk premium N/A 2.08 8.48 Standard deviation 3.14 8.14 19.99 14.71 38.07 56.38 min -0.02 -8.47 -43.73 max Problem 5.9 Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index stock portfolio if the current risk-free interest rate is 4.8%? (Round your answer to 2 decimal places.) Expected annual HPR %

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