Historical mean returns and risk measures are presented for four classes of assets, in both nominal and inflation-adjusted for M. Over the period 1974–85, Australian stocks and property earner appreciably more than inflation, whereas Government securities earned a zero or very low real rate of return. Equity returns were of course much riskier than bond returns, and property was more like equity than fixed interest securities in terms of risk. All four classes of investment assets were poor hedges against inflation.
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2.
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