Investing in securities


The countries of Stabilato and Variato hae the following average returns and standard deviations for their stocks, bond, and short-term government securities. What range of returns should you expect to earn 95 percent of the time for each asset class if you invested in Stabilato's securities? From investing in Variato's securities?

Satabilato Asset Average RTN Standard DEV

Stocks 8% 3%

Bonds 5% 2%

Short-term gov debt 3% 1%

Variato Asset AVG RTN Standard DE

Stocks 15% 13%

Bonds 10% 8%

Short-term gov Debt 6% 3%

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Finance Basics: Investing in securities
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