Consider the following table and answer parts a., b., and c. below: Average Return T-Bills T-Bonds...

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Consider the following table and answer parts a., b., and c. below: Average Return T-Bills T-Bonds Stocks 3.8% 5.7% 13.2% a. What is the risk premium of Stocks vs. T-Bills? (Show your calculation) Standard Deviation 3.2% 9.2% 20.3% b. What is the expected return of a portfolio invested 5% in cash (Bills), 45% in Bonds, and 50% in stocks? (Show your calculation) c. If stocks do so much better than bonds or cash over time, why not invest everything in the stock market? Consider the following table and answer parts a., b., and c. below: Average Return T-Bills T-Bonds Stocks 3.8% 5.7% 13.2% a. What is the risk premium of Stocks vs. T-Bills? (Show your calculation) Standard Deviation 3.2% 9.2% 20.3% b. What is the expected return of a portfolio invested 5% in cash (Bills), 45% in Bonds, and 50% in stocks? (Show your calculation) c. If stocks do so much better than bonds or cash over time, why not invest everything in the stock market?

Answer rating: 100% (QA)

a The risk premium of Stocks vs TBills is calculated by subtracting the TBill return from the ... View the full answer