Question
Assume these were the inflation rates and stock market and Treasury bill returns between 1929 and 1933: Year Inflation Stock Market Return T-Bill Return 1929
Assume these were the inflation rates and stock market and Treasury bill returns between 1929 and 1933:
Year | Inflation | Stock Market Return | T-Bill Return |
1929 | .5 | 13.2 | 6.1 |
1930 | 5.5 | 30.7 | 2.9 |
1931 | 9.3 | 47.6 | 1.5 |
1932 | 13.2 | 8.2 | .8 |
1933 | .9 | 64.2 | .6 |
a. What was the real return on the stock market in each year? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Year | Real Return |
1929 | % |
1930 | % |
1931 | % |
1932 | % |
1933 | % |
b. What was the arithmetic average real return? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Average real return %
c. What was the risk premium in each year? (Negative answers should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places.)
Year | Risk Premium |
1929 | % |
1930 | % |
1931 | % |
1932 | % |
1933 | % |
d. What was the average risk premium? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Average risk premium %
e. What was the standard deviation of the risk premium? (Do not make the adjustment for degrees of freedom described in footnote 18.) (Use decimals, not percents, in your calculations. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Standard deviation
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