Consider the following rates of return:

Year	Large-Company Stocks			US Treasury Bills
1	3.90	%		5.84	%
2	14.47			2.49
3	19.21			3.72
4	14.47			7.14
5	31.96			5.26
6	37.45			6.39

a.	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.)

	Average returns
Large-company stocks	%
T-bills	%

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.)

	Standard deviation
Large-company stocks	%
T-bills	%

c-1.

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic 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.)

Average risk premium

%

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.)

Standard deviation

%