Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

TABLE 12.1 Year-to-Year Total Returns: 19262019

Year	Large-Company Stocks	Long-Term Government Bonds	U.S. Treasury Bills	Consumer Price Index
1926	11.62%	7.77%	3.27%	1.49%
1927	37.49	8.93	3.12	2.08
1928	43.61	.10	3.56	.97
1929	8.42	3.42	4.75	.20
1930	24.90	4.66	2.41	6.03
1931	43.34	5.31	1.07	9.52
1932	8.19	16.84	.96	10.30
1933	53.99	.07	.30	.51
1934	1.44	10.03	.16	2.03
1935	47.67	4.98	.17	2.99
1936	33.92	7.52	.18	1.21
1937	35.03	.23	.31	3.10
1938	31.12	5.53	.02	2.78
1939	.41	5.94	.02	.48
1940	9.78	6.09	.00	.96
1941	11.59	.93	.06	9.72
1942	20.34	3.22	.27	9.29
1943	25.90	2.08	.35	3.16
1944	19.75	2.81	.33	2.11
1945	36.44	10.73	.33	2.25
1946	8.07	.10	.35	18.16
1947	5.71	2.62	.50	9.01
1948	5.50	3.40	.81	2.71
1949	18.79	6.45	1.10	1.80
1950	31.71	.06	1.20	5.79
1951	24.02	3.93	1.49	5.87
1952	18.37	1.16	1.66	.88
1953	.99	3.64	1.82	.62
1954	52.62	7.19	.86	.50
1955	31.56	1.29	1.57	.37
1956	6.56	5.59	2.46	2.86
1957	10.78	7.46	3.14	3.02
1958	43.36	6.09	1.54	1.76
1959	11.96	2.26	2.95	1.50
1960	.47	13.78	2.66	1.48
1961	26.89	.97	2.13	.67
1962	8.73	6.89	2.73	1.22
1963	22.80	1.21	3.12	1.65
1964	16.48	3.51	3.54	1.19
1965	12.45	.71	3.93	1.92
1966	10.06	3.65	4.76	3.35
1967	23.98	9.18	4.21	3.04
1968	11.06	.26	5.21	4.72
1969	8.50	5.07	6.58	6.11
1970	3.86	12.11	6.52	5.49
1971	14.30	13.23	4.39	3.36
1972	19.00	5.69	3.84	3.41
1973	14.69	1.11	6.93	8.80
1974	26.47	4.35	8.00	12.20
1975	37.23	9.20	5.80	7.01
1976	23.93	16.75	5.08	4.81
1977	7.16	.69	5.12	6.77
1978	6.57	1.18	7.18	9.03
1979	18.61	1.23	10.38	13.31
1980	32.50	3.95	11.24	12.40
1981	4.92	1.86	14.71	8.94
1982	21.55	40.36	10.54	3.87
1983	22.56	.65	8.80	3.80
1984	6.27	15.48	9.85	3.95
1985	31.73	30.97	7.72	3.77
1986	18.67	24.53	6.16	1.13
1987	5.25	2.71	5.47	4.41
1988	16.61	9.67	6.35	4.42
1989	31.69	18.11	8.37	4.65
1990	3.10	6.18	7.81	6.11
1991	30.47	19.30	5.60	3.06
1992	7.62	8.05	3.51	2.90
1993	10.08	18.24	2.90	2.75
1994	1.32	7.77	3.90	2.67
1995	37.58	31.67	5.60	2.54
1996	22.96	.93	5.21	3.32
1997	33.36	15.85	5.26	1.70
1998	28.58	13.06	4.86	1.61
1999	21.04	8.96	4.68	2.68
2000	9.10	21.48	5.89	3.39
2001	11.89	3.70	3.83	1.55
2002	22.10	17.84	1.65	2.38
2003	28.68	1.45	1.02	1.88
2004	10.88	8.51	1.20	3.26
2005	4.91	7.81	2.98	3.42
2006	15.79	1.19	4.80	2.54
2007	5.49	9.88	4.66	4.08
2008	37.00	25.87	1.60	.09
2009	26.46	14.90	.10	2.72
2010	15.06	10.14	.12	1.50
2011	2.11	27.10	.04	2.96
2012	16.00	3.43	.06	1.74
2013	32.39	12.78	.02	1.51
2014	13.69	24.71	.02	.76
2015	1.38	.65	.02	.73
2016	11.96	1.75	.20	2.07
2017	21.83	6.24	.80	2.11
2018	4.38	.57	1.81	1.91
2019	31.49	12.16	2.14	2.29

Source: 2020 SBBI Yearbook. Duff & Phelps.