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Consider the following table for a period of six years Returns Large-Company Stocks U.S Treasury Bills Year 1973 1974 1975 1976 1977 1978 -14.69% -26.47
Consider the following table for a period of six years Returns Large-Company Stocks U.S Treasury Bills Year 1973 1974 1975 1976 1977 1978 -14.69% -26.47 37.23 23.93 - 7.16 6.57 20% 7.99 5.87 5.07 5.45 7.64 Requirement 1: Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Arithmetic average returns 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 (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Standard deviation Large company stock T-bills Requirement 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? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium (b) What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium standard deviation
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