Question: 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

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?

Yearly returns from 1929-1940 for the S&P 500, small stocks, corporate bonds, world portfolio, Treasury bills, and inflation (as measured by the CPI).
Year S&P 500 Small Stocks Corp Bonds World Portfolio Treasury Bills CPI
1929 -0.08906 -0.43081 0.04320 -0.07692 0.04471 0.00585
1930 -0.25256 -0.44698 0.06343 -0.22574 0.02266 -0.06395
1931 -0.43861 -0.54676 -0.02380 -0.39305 0.01153 -0.09317
1932 -0.08854 -0.00471 0.12199 0.03030 0.00882 -0.10274
1933 0.52880 2.16138 0.05255 0.66449 0.00516 0.00763
1934 -0.02341 0.57195 0.09728 0.02552 0.00265 0.01515
1935 0.47221 0.69112 0.06860 0.22782 0.00171 0.02985
1936 0.32796 0.70023 0.06219 0.19283 0.00173 0.01449
1937 -0.35258 -0.56131 0.02546 -0.16950 0.00267 0.02857
1938 0.33204 0.08928 0.04357 0.05614 0.00060 -0.02778
1939 -0.00914 0.04327 0.04247 -0.01441 0.00042 0.00000
1940 -0.10078 -0.28063 0.04512 0.03528 0.00037 0.00714

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