Question: Using information from Table 10.2 in Chapter 10 about capital market history, determine the return on a portfolio that is equally invested in Canadian common

Using information from Table 10.2 in Chapter 10 about capital market history, determine the return on a that is equally invested in Canadian common stocks and bonds. What is the return on a that is equally invested in small stocks and Treasury bills?

Table 10.2

Average Annual Returns, 1957 to 2013 Arithmetic average return (%) 10.43 Standard premium deviation Risk Investment Distribution 4.46 16.64 stocks --30-25-20-15-10-5 0 5 10 15 20 25 30 3 0 45 US common 11.64 5.67 10 SCAN) 30-25-20-15-10-505 0 15 20 25 30 35 40 45 Arithmetic average return (%) 8.38 Risk premium deviation Distribution Investment Long bonds 2.41 9.81 16 14 12 0 -20-15-10-5 0 10 15 20 25 30 35 40 45 50 Small stocks14.16 8.19 26.25 90-45 AD 15-30 25 2 15-10-50 5 1015 20 25 30 35 0 45 50 55

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