Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following table for a period of six years: Year 1 2 3 4 5 6 Returns Large- U.S. Company Treasury Bills Stocks -

image text in transcribedimage text in transcribed

Consider the following table for a period of six years: Year 1 2 3 4 5 6 Returns Large- U.S. Company Treasury Bills Stocks - 15.39% 7.43% -26.68 8.06 37.37 6.01 24.07 5.77 7.44 5.52 6.71 7.85 a-1. 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.) a-2. 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.) Large-company stocks T-bills % % a-1. Arithmetic average return a-2. Standard deviation % % Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. b-1. 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.) b-2. 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.) % b-1. Average risk premium b-2. Risk premium standard deviation %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Venture capital and the finance of innovation

Authors: Andrew Metrick

2nd Edition

9781118137888, 470454709, 1118137884, 978-0470454701

More Books

Students also viewed these Finance questions