Quiz: Module 3 - Homework Prol X V X M Inbox (3,519) - septicia9@gmail.c x e Home - Montclair State University X + -> C montclair.instructure.com/courses/173004/quizzes/389035/take IS : M Gmail YouTube Maps SUMMER 2023 D Question 4 25 pts Home Announcements 4. The figure below was taken from a Module 3 ppt slide and shows the returns of various asset classes ranked Account Syllabus from highest to lowest during each year from 2000 to 2017. Each asset class is represented by a different color. For example, the white box shows cash returns; the light green box shows commodity returns; the dark People Dashboard blue box shows S&P 500 returns and so on. Modules Courses Grades 4 Recall that one of the implications of "no free lunch" is the risk vs. return trade-off, where higher risk assets Zoom have higher expected returns and lower risk assets have lower expected returns. If this were to hold true each year, one would expect returns of riskier assets to rank amongst highest each year and returns less risky assets Groups Assignments to rank amongst the lowest. Discussions Calendar Quizzes The color pattern in the figure below is random. Meaning that in any given year, returns of less risky assets Pages may or may not exceed that of higher risk assets. For example, in 2000, 2001 & 2008, US Treasury bonds & Inbox cash (less risky assets) had higher returns than that of the S&P 500 & MSCI-EAFE (higher risk assets). Library Resources Reconcile this phenomenon with the risk vs. return trade-off. Does this violate "no free lunch"? Explain. History EvaluationKIT Course 2001 2002 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ommod REITS MSCI EM REITS MSC EM MSCI EM SAP 500 SAP 50 SAP 500 MSCI EM 25 9S 34 5% 37 5% 39 BK 79 0% Follett 14 0% NC 62 23 8% 37 8% Follett SCI EAFE USCI EM MSCI EM Global HY SCIEN Sobal HY MSCLEAF REITS SAP 500 MSCI EAFE Discover 39 7% 21 4% 32 6% 31 PM 13% 19 2% 193% 23 3% 1175 12 0% 25 9S REITS REITS MSCI EAFE Gold ISCI FAFE Commodit Cast SCIFAFF Global IG SCIEN Global HY mmode SAP 500 85% 445 33 5% 20 7% 17 85 26 9% 16 2% 218 32 5% 16 8% 45% 18 8% 80% 118% ? Good HY Global HY USCI EAR Gold MSCI EAFE REITS REITS SCI EAF MSCI EAFF MSCI EM Gold Help 3 15 30 7% 12 4% 14 0% 23 2% 11 0% 8.3 31.7%% 15 9% 28% 17 9% 07% 32% 112% 1285 deal IG Gold Cash MAP 500 SAP 500 REITS SAP 500 Global H AP 500 MAP 500 SAP 500 AP 500 Global IG REITS REITS K 3.15 28 7% 10 9% 10 7% 15 8% 15. 1% 345 9 1% 27.9% 26 5% 21% 16 0% Bes 115% 67OF 8:16 PM C Q Search P 5/18/2023 Mostly sunny