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Consider the following rates of return for the period from 1970 through 1975: Year Large-Company Stocks U.S. Treasury Bills 1970 3.94% 6.50% 1971 14.30 4.36

Consider the following rates of return for the period from 1970 through 1975:

Year Large-Company Stocks U.S. Treasury Bills
1970 3.94% 6.50%
1971 14.30 4.36
1972 18.99 4.23
1973 -14.69 7.29
1974 -26.47 7.99
1975 37.23 5.87

What was the average risk premium over this period for large-company stocks?

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