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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.

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