Question: Given your risk tolerance, and your need to diversify, explain how the Selected Realized Returns (19262013) page 269 and the Effects of Portfolio Risk for

Given your risk tolerance, and your need to diversify, explain how the Selected Realized Returns (19262013) page 269 and the Effects of Portfolio Risk for Average Stocks will impact your future investment decisions and why

Selected Realized Returns, 1926-2013:

Average Return Standard Deviation

Small-Company Stocks 16.9% 32.3%

Large Company stocks 12.1 20.2

Long term corporate bonds 6.3 8.4

Long-term government bonds 5.9 9.8

US Treasury Bills 3.5 3.1

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