Question: Using the bond returns in Table 10 1 as a basis

Using the bond returns in Table 10.1 as a basis of discussion:
a. Compare the returns during the 1970s to those produced in the 1980s. How do you explain the differences?
b. How did the bond market do in the 1990s? How does the performance in this decade compare to that in the 1980s? Explain.
c. What do you think would be a reasonable rate of return to expect from bonds in the future? Explain.
d. Assume that you’re out of school and hold a promising, well-paying job. How much of your portfolio (in percentage terms) would you want to hold in bonds? Explain.
What role do you see bonds playing in your portfolio, particularly as you go farther
and farther into the future?

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