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7.value: 1.00 points Consider the following table for a period of six years. Returns Year Large-Company Stocks U.S. Treasury Bills Year 1 15.19 % 7.39

7.value: 1.00 points Consider the following table for a period of six years. Returns Year Large-Company Stocks U.S. Treasury Bills Year 1 15.19 % 7.39 % Year 2 26.62 8.04 Year 3 37.33 5.97 Year 4 24.03 5.57 Year 5 7.36 5.50 Year 6 6.67 7.79 Requirement 1: Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Arithmetic average returns Large-company stock 3.14 % T-bills 6.71 % Requirement 2: Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Standard deviation Large-company stock 589.94 % T-bills % Requirement 3: Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. (a) What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium 1.34 % (b) What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium standard deviation 1.34 %

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