4. Risk premium (S7.1) Here are inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Year 1929 1930 1931 1932 1933 Inflation, % -0.2 -6.0 -9.5 -10.3 0.5 Stock Market Return, % -14.5 -28.3 -43.9 -9.9 57.3 T-Bill Return, % A. What was the real return on the stock market in each year? B. What was the average real return? C. What was the risk premium in each year? D. What was the average risk premium? 4.8 2.4 1.1 1.0 0.3

Risk premium (S7.1) Here are inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933 : A. What was the real return on the stock market in each year? B. What was the average real return? C. What was the risk premium in each year? D. What was the average risk premium