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

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Consider the following table for a period of six years Returns U.S Large-Company Stocks Treasury Bills Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 15.79% -26.80 37.45 24.15 7.60 6.79 7.51% 8.10 6.09 6.17 5.56 7.97 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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