1. calculate the standard deviation of the treasury bill returns and inflation over the period. ( include step by step workings)

2. many people consider treasury bills to be risk free. what do these calculations tell you about the potential risks of the treasury bills

QUESTION 1 (25 marks) Read the following scenario and answer the questions that follow Referring to the US market, the following table shows the returns offered by Treasury bills (T-bills) and the annual inflation for the years from 1973 to 1980 T-bills 7.29% 7.99% 5.87% 5.07% 5.45% 7 64% 10.56% Year 1973 1974 1975 1976 1977 1978 1979 1080 | 12.10% Inflation 8.71% 12.34% 6.94% 4 86% 6.70% 9.02% 13 29% 12.52% | |