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Consider the following table for a period of six years: Year Returns Large - Company Stocks U . S . Treasury Bills 1 1 5
Consider the following table for a period of six years:
Year Returns
LargeCompany Stocks US Treasury Bills
a Calculate the arithmetic average returns for largecompany stocks and Tbills over this time period.
Note: Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
a Calculate the standard deviation of the returns for largecompany stocks and Tbills over this time period.
Note: Do not round intermediate calculations and enter your answers as a percent rounded to decimal places, eg
Calculate the observed risk premium in each year for the largecompany stocks versus the Tbills.
b What was the arithmetic average risk premium over this period?
Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to decimal places, eg
b What was the standard deviation of the risk premium over this period?
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