Consider the following table for a period of six years.

	Returns
Year	Large-Company Stocks					U.S. Treasury Bills
Year 1			14.89	%		7.33	%
Year 2			26.53			8.01
Year 3			37.27			5.91
Year 4			23.97			5.27
Year 5			7.24			5.47
Year 6			6.61			7.70

1) Calculate the arithmetic average returns for large-company stocks and T-bills over this time period.

2) Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period.

3) 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?

(b) What was the standard deviation of the risk premium over this period?