Series Average return Determine the return on a portfolio that was equally inves
ID: 2780654 • Letter: S
Question
Series
Average return
Determine the return on a portfolio that was equally invested in large-company stocks and long-term corporate bonds. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
What was the return on a portfolio that was equally invested in small stocks and Treasury bills? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)
Use the following table of returns from 1926 through 2011:Explanation / Answer
1) portfolio return = 0.5*11.8% + 0.5*6.4 = 9.10%
2) portfolio return = 0.5*16.5% + 0.5*3.6% = 10.05%
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