Download the spreadsheet from the book’s Web site containing the data for Figure 11.1.

a. Compute the average return for each of the assets from 1929 to 1940 (the Great Depression).

b. Compute the variance and standard deviation for each of the assets from 1929 to 1940.

c. Which asset was riskiest during the Great Depression? How does that fit with your intuition?

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$10,000,000 Value of Investment $1,000,000 $100,000 $10,000 $1,000 $100 $10 1925 Small Stocks S&P 500 World Portfolio Corporate Bonds Treasury Bills CPI 1935 1968-74: -63%, -37% 1937-38: -72%, -50% 1987: 34%, -30% 1928-32: Small stocks-92%, S&P 500 - 84% 1945 1955 1965 1975 Year 2000-02: -26%, -45% 2007-09: -67%, -51% 1985 Bernier 1995 $4,723,025 2005 2015 $635,430 $227,975 1979-81: Inflation, TBill yields peak at 15% $22,253 $2,098 $1,404