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tion.com/hm.tpx Problem 9-19 Risk versus Return in Bonds (LG9-2, LG9-4) Table 9.

ID: 2797382 • Letter: T

Question

tion.com/hm.tpx Problem 9-19 Risk versus Return in Bonds (LG9-2, LG9-4) Table 9.2 Average Returns for Bonds 1950 to 1959 Average 1960 to 1969 Average 970 to 1979 Average 1980 to 1989 Average 1990 to 1999 Average 2000 to 2009 Average 0.0% 1.5 5.8 13.4 9.7 8.4 Table 9.4 Annual Standard Deviation for Bonds 1950 to 1959 1960 to 1969 1970 to 1979 1980 to 1989 1990 to 1999 2000 to 2009 4.4% 6.1 6.8 15.9 12.8 10.3 Calculate the coefficient of variation of the risk-returm relationship of the bond market (Use the above Tables) during each decade since 1950. (Round your answers to 2 decimal places.) Cov Not Available 1950s 1960s 1970s 1980s 1990s 2000s 4 F7 20 p FS FI F2

Explanation / Answer

coefficient of variation = SD / Mean

1950s = 4.4% /0.0% = Not available

1960s = 6.1% /1.5% = 4.07

1970s = 6.8% /5.8% = 1.17

1980s = 15.9% /13.4% = 1.19

1990s = 12.8% /9.7% = 1.32

2000s = 10.3% /8.4% = 1.23