Exhibit 26 shows the values of the S&P 500 and three exchange-traded funds (ETFs)

for the end of each of 18 months from April 2012 through September 2013. The ETFs are for long-term US Treasury securities, the STOXX Europe 50 Index, an emerging Europe SPDR. SPDR stands for Standard & Poor’s Depositary Receipt.

To produce the information for Exhibit 27, we divided each ETF value by the S&P 500 value for the same month and then scaled those results so that the value of the relative-strength indicator (RSTR) for April 2012 would equal 1.0. To illustrate, on 2 April 2012, the value of TLO divided by the S&P 500 was 65.77/1,397.91 = 0.0470.
The RSTR for TLO on that date, by design, is then 0.0470/0.0470 = 1.0. In May, the value of TLO divided by the S&P 500 was 70.86/1,310.33 = 0.0541, which we scaled by the April number. The RSTR for 1 May 2012 for GLD is 0.0541/0.0470 = 1.1494, shown in Exhibit 27 as 1.149.

On the basis of Exhibits 26 and 27, address the following:
i. State the relative strength of long-term US Treasury securities, STOXX Europe 50 Index, and emerging Europe stocks over the entire time period April 2012 through September 2013. Interpret the relative strength for each sector over that period.

ii. Discuss the relative performance of the STOXX Europe 50 Index ETF and the emerging Europe ETF in the period ending 3 December 2012.

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EXHIBIT 26 A Relative Strength Comparison SPDR Barclays SPDR Stoxx Date S&P 500 Index Long-Term Treasury (TLO) Europe 50 Index SPDR S&P Emerging Europe (FEU) ETF (GUR) 2-Apr-2012 1397.91 65.77 29.46 39.55 1-May-2012 1310.33 70.86 26.32 32.42 1-Jun-2012 1362.16 69.98 28.45 35.96 2-Jul-2012 1379.32 72.29 28.71 36.06 1-Aug-2012 1406.58 71.38 29.75 37.89 4-Sep-2012 1440.67 69.93 30.52 39.46 1-Oct-2012 1412.16 69.76 30.92 39.05 1-Nov-2012 1416.18 70.49 31.51 39.25 3-Dec-2012 1426.19 68.72 32.62 42.90 2-Jan-2013 1498.11 66.81 33.98 43.54 1-Feb-2013 1514.68 67.62 32.80 40.86 1-Mar-2013 1569.19 67.53 33.12 40.26