A famous set of studies dealing with rates of return on common stocks, bonds, and Treasury bills was conducted by Roger Ibbotson and Rex Sinquefield. They present year-by-year historical rates of return starting in 1926 for the following five important types of financial instruments in the United States:

- Large-company Common Stocks

- Small-company Common Stocks

- Long-term Corporate Bonds

- Long-term U.S. Government Bonds

- U.S. Treasury Bills

What securities have offered the highest average annual returns over the last several decades? How do we calculate the risk premium of a given type of instrument?