Chapter 10

Suppose we have the following Treasury bill retums and inflation rates over an eight-year period: 10.86% 14.41 8.80 6.39 8.56 10.99 15.15 14.89 9.01% 29.87 7.62 6.71 7.20 9.50 12.33 14.09 5 Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations and entor your answers as a porcent rounded to 2 decimal places, e.g., 32.16.) Average return Treasury bills Inflation b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round ded to 2 decimal places, e.g. intermediate calculations and enter your answers as a percent roun 32,16.) Standard deviation Treasury bills Inflation c. What was the average real return for Treasury bills 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.) Average real returrn References eBook &Resources 25