6

Suppose we have the following Treasury bill returns and inflation rates over an eight year period:

Year	Treasury Bills	Inflation
1	10.45	12.55
2	11.36	16.00
3	9.06	10.29
4	8.34	7.97
5	8.88	10.29
6	11.23	12.77
7	14.11	16.98
8	15.97	16.90

a.	Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Round your answers to 2 decimal places. (e.g., 32.16))

Treasury bills	%
Inflation	%

b.	Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

Treasury bills	%
Inflation	%

c.	What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))

Average real return

%