Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider the following table for an eight-year period: Year 1 2 3 4 5 6 7 8 T-bill return 7.37% 8.44 5.95 5.47 5.53

 

Consider the following table for an eight-year period: Year 1 2 3 4 5 6 7 8 T-bill return 7.37% 8.44 5.95 5.47 5.53 8.04 10.64 12.50 Inflation 8.638 12.26 6.86 4.94 6.62 8.94 13.21 12.44 a. Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.1 b. Calculate the standard deviation of Treasury bill returns and inflation over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.14 c. Calculate the real return for each year. Note: A negative answer should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. d. What is the average real return for Treasury bills? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answ as a percent rounded to 2 decimal places, e.g., 32.16.

Step by Step Solution

3.49 Rating (162 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the average return for Treasury bills and the average annual inflation rate as well as the standard deviation of Treasury bill returns an... blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Finance questions

Question

11. What is the evidence that taste is not suffi cient for satiety?

Answered: 1 week ago