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Consider the following table for a period of six years: Returns Year Large-Company Stocks U.S. Treasury Bills 1 14.79 % 7.31 % 2 26.50 8.00

Consider the following table for a period of six years:

Returns
Year Large-Company Stocks U.S. Treasury Bills
1 14.79 % 7.31 %
2 26.50 8.00
3 37.25 5.89
4 23.95 5.17
5 7.20 5.46
6 6.59 7.67

Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)


Arithmetic average returns
Large-company stock %
T-bills %

Calculate the standard deviation of the returns for large-company stocks and T-bills over this time 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 stock %
T-bills %

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. a. 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 % b. 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.) Risk premium standard deviation %

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