Reference no: EM131208383
Investments
Instructions for Asset Returns Paper
Step 1 Extending Siegel (1992) graphs to 2014
This section uses the file "AssetHistoricalReturns" to replicate and extend Siegel (1992) results to 2014.
1. Create a chart that plots the value of a dollar invested in the CPI index (inflation), short-term government bonds (T-Bills), long-term investment grade corporate bonds (AA bonds), long-term high-yield corporate bonds (BBB bonds), U.S. stocks, U.S. small stocks, and real estate. Label and position the chart. Make sure the reader can easily understand the graph.
2. Create another chart similar to the above but this time adjust returns for inflation. (Obviously, for this graph you don't need to plot the inflation itslef.)
3. Comment based on the charts. Some suggestions are: Which assets had higher returns over the 1990-2014 period? Did you expect the ranking in returns between assets? Did all assets compensate investors for inflation? Note on the correlation between returns based on the graph, especially during the financial crisis of 2008. Overall, is the results consistent with Figure A of Siegel (1992)? Explain your answers.
Step 2 Compute Statistics
This section computes statistics and compare them to those of Siegel (1992).
4. Compute average arithmetic, average geometric, and standard deviation based on nominal returns. Compute average arithmetic, average geometric, and standard deviation based on real (inflation adjusted) returns. Create a table and report the annualized statistics for all measures. To annualize returns, multiply the values by 12 (there are 12 months in a year), for standard deviation, multiply the values by √12. Make sure the table is labeled and has captions.
5. Compare your statistics for inflation, U.S. stocks, and U.S. T-bills to those of Siegel. [Siegel report stock statistics in Table I, bond in Table II, and inflation (CPI) in Table III.] Based on your statistics for the 25 year period of 1990-2014 and those of Siegel, what do you think about the trends in returns of stocks and bonds? Is history repeating or are there any structural breaks?
Final Instructions
1. Please copy/paste the relevant results and include everything in ONE document. I will only grade one document. The document should be in PDF format and posted to Canvas portal.
2. Please do not include any raw data in your paper. You are preparing a report/paper similar to Siegel (1992).
3. Please make sure your paper is properly formatted (does not include any of my instructions, fonts are consistent, columns are aligned, etc). This should be a professional looking document. Format (the paper, graphs, and tables, captions) is very important.
Attachment:- Assethistoricalreturns.xlsx
Current ratio before and after issuing the note
: On June 30, 2014, Freeman Company’s total current assets were $496,500 and its total current liabilities were $274,500. On July 1, 2014, Freeman issued a short-term note to a bank for $39,800 cash. Compute Freeman’s working capital before and after i..
|
What is internal generated voltage per phase inside motor
: A 4.12 kV, 60 Hz, 3000-hp 0.8-PF-leading, Δ-connected, three- phase synchronous motor has a synchronous reactance of 1.1 per unit and an armature re at rated voltage with a line current of 300 A at 0.85 PF leading, what is the internal generated v..
|
Design of a research study
: Strategic Financial Project [PAM006] - The focus is the design of a research study. Your response to the requirement must be between 3,000 and 3,500 words. Penalties apply for exceeding the word count. No formal penalties apply for using fewer than..
|
Difference between a profit center and an investment center
: The difference between a profit center and an investment center is
|
Find average arithmetic and geometric based on real returns
: Compute average arithmetic, average geometric, and standard deviation based on nominal returns. Compute average arithmetic, average geometric, and standard deviation based on real (inflation adjusted) returns.
|
Compute the accounts receivable turnover-inventory turnover
: Selected data from Komar Company follow. Balance Sheet As of December 31 2014 2013 Accounts receivable $ 404,000 $ 378,000 Allowance for doubtful accounts (20,200 ) (15,120 ) Net accounts receivable $ 383,800 $ 362,880 Inventories, lower of cost or m..
|
Executive and legislative shared powers
: Provide a case study paper, which examines the process of the shared powers between the executive and legislative federal branches of government as it relates to this particular article. You will want to relate the case study to what you have lear..
|
Write the given paper assignment on the topic of humanities
: Write the given paper assignment on the topic of Humanities. - Coose two people to compare and contrast for the project.
|
Conduct strategic analysis of this business or organization
: You are required to conduct a strategic analysis of this business or organization. This should involve external and internal environmental scanning, including PESTEL, Five- forces analysis, Stakeholder analysis, internal strength-weakness and SWOT..
|