Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Consider the following table for a period of six years Returns Large-Company Stocks -15.79% 26.80 37.45 24.15 7.60 6.79 U.S Treasury Bills Year Year 1

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Finance questions