Question: Selected Realized Returns, 1926-2017 Standard Deviation Average Return 16.5% 31.7% 19.8 12.1 6.4 8.3 6.0 9.9 Small-cap stocks Large-cap stocks Long-term corporate bonds Long-term government

Selected Realized Returns, 1926-2017 Standard Deviation Average Return 16.5% 31.7% 19.8 12.1 6.4 8.3 6.0 9.9 Small-cap stocks Large-cap stocks Long-term corporate bonds Long-term government bonds U.S. Treasury bills Portfolios: 90% stocks/10% bonds 70% stocks/30% bonds 3.4 3.1 17.8% 11.4% 10.2 14.1 Source: Based on Roger G. Ibbotson, Stocks, Bonds, Bills, and Inflation: 2018 Yearbook (Chicago, IL: Duff & Phelps, 2018), pp. 2-6, 2-23. The Sharpe Ratio f&r Small-cap stocks, assuming RF rate is US Treasury Bills? 0.317 0.52 0.165 0.33 0.41

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