1. The average annual return on an Index from 1986 to 1995 was 16.10 percent. The average annual T-bill yield during the same period was 6.30 percent.

What was the market risk premium during these ten years? (Round your answer to 2 decimal place.)

Average Market Risk Premium= ________%

2. Suppose the NASDAQ stock market bubble peaked at 5,165 in 2000. Two and a half years later it had fallen to 1,210. What was the percentage decline? (Negative answer should be indicated with a minus sign. Round your answer to 2 decimal places.)

Market Decline=_______________%

3. Suppose Paccar