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Consider the following table for a period of six years. Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Returns Large-Company
Consider the following table for a period of six years. Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Returns Large-Company U.S. Stocks Treasury Bills -15.69% 7.49% -26.77 8.09 37.43 24.13 6.07 7.56 5.55 6.77 7.94 6.07 Requirement 1: Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. Large company stock: T-bills: Requirement 2: Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. Large company stock: T-bills: Requirement 3: Calculate the observed risk premium in each year for the large-company stocks versus the T-bills
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