Investment Fraud Awareness

82 22 Calculating "Reasonable" Rate of Return For the purposes of this study, we consider a "reasonable" market rate of return to be anything less than 4%. This rate is based on the 5-year nominal return of 3.8% on three-month treasury bills, all Canadian bonds, and the TSX Composite Index between 2015 and 2019. In 2017 the reasonable rate of return, calculated based on the years 2012 to 2016 was also 4%. 5 year 'Nominal' Return 2015 2016 2017 2018 2019 average Three-month T-bills 0.6% 0.5% 0.6% 1.3% 1.7% 0.9% All Canadian Bonds 3.5% 1.7% 2.5% 1.4% 6.9% 3.2% TSX Composite Index -8.3% 21.1% 9.1% -8.9% 22.9% 7.2% Equal weighted average across asset classes -1.4% 7.8% 4.1% -2.1% 10.5% 3.8% Source: BCSC Note: Nominal is the stated return, while real is stated return minus inflation rate. INNOVATIVE RESEARCH GROUP

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