Copyright ©2005 Ibbotson Associates, Inc. Risk and Volatility Securities offered through Lincoln Financial Advisors Corp., a broker/dealer, 1300 S. Clinton Street, Fort Wayne, IN , Phone Insurance offered through Lincoln affiliates and other fine companies. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. CRN

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Types of risk  Industry/company risk  Market risk  Credit risk  Interest rate risk  Call/reinvestment risk  Inflation risk  Liquidity risk  Currency risk  Political/economic risk  Market timing risk

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Stock diversification Number of stocks in portfolio Risk Market risk Company risk

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. High risk Low risk High return Low return Small company stocks International stocks Large company stocks Corporate bonds Government bonds Cash equivalents Risk tolerance spectrum

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Each bar shows the range of compound annual returns for each asset class over the period 1926– year holding periods Small company stocks Large company stocks Government bonds Treasury bills -75% -50% -25% 0% 25% 50% 75% 100% 125% 150% 20-year holding periods 5-year holding periods 10.4% 12.7% 5.4% 3.7% Compound annual return 1926–2004 Reduction of risk over time

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Each bar shows the range of annual total returns for each asset class over the period 1926–2004. Annual ranges of return Long-term government bonds Intrmd.-term government bonds Treasury bills Small company stocks Large company stocks Highs and lows: 1926–2004 Asset class returns 54.0% 14.7% 29.1% 0.0% -5.1% -43.3% -100% -50% 0% 50% 100% 150% 142.9% -58.0% 40.4% -9.2% 3.7% 5.4% 10.4% 12.7% Average return Highest annual return Lowest annual return

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Risk versus return Stocks, Bonds, and Bills 1926–2004 Risk is measured by standard deviation. Return is measured by compound annual return. Risk Return Treasury bills 0% 2% 4% 6% 8% 10% 12% 14% 0%5%10%15%20%25%30%35% Intermediate-term government bonds Long-term government bonds Small company stocks Large company stocks

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. 5.4%5.8%9.3% 3.0%3.1%4.3% 3.7%3.8%3.1% 10.4%12.4%20.3% 12.7%17.5%33.1% *The 1933 small company stock total return was 142.9%. Compound annual return Arithmetic annual return Government bonds Treasury bills Large company stocks Inflation * Risk (standard deviation) Stocks, Bonds, Bills, and Inflation Small company stocks Summary Statistics 1926–

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Monthly returns in percent from 1926– –2004 Volatility of stock and bond returns Monthly returns Stocks -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% Year-end % -30% -20% -10% 0% 10% 20% 30% 40% 50% Bonds Year-end

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. 1970–2004 Fixed-income maturity risk Short-term gov’t bond Intermediate-term gov’t bond Long-term gov’t bond Average rise in price during declining interest rate periods Average decline in price during rising interest rate periods 1.5% 5.9% 9.8% -1.4% -7.9% -4.1% -10% -5% 0% 5% 10% 15%

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. -5% 0% 5% 10% 15% 20% Range of average inflation-adjusted returns over 20-year periods 1926–2004 Government bonds Small company stocks Large company stocks 8.6% -3.1% 17.2% 4.0% 13.3% 0.8% 2.9% -3.0% Treasury bills Inflation risk: stocks versus fixed income

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Average stock trading volume for the year Company size by decile Average daily volume (in millions) LargestSmallest Liquidity risk

This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. Past performance is no guarantee of future results. 3/1/2005 Copyright ©2005 Ibbotson Associates, Inc. Annual return minus best month Annual return The effects of missing the best month on annual returns Market timing risk Return if the best month is missed Compound annual return Return if invested for the whole year Return if invested for the whole year Return if the best month is missed -40% -30% -20% -10% 0% 10% 20% 30% 40%