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Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.41 % 8.59 % 2 8.64 12.22 3 5.99 6.82 4 5.67

Consider the following table for an eight-year period:

Year T-bill return Inflation
1 7.41 % 8.59 %
2 8.64 12.22
3 5.99 6.82
4 5.67 4.98
5 5.57 6.58
6 8.24 8.90
7 10.68 13.17
8 12.70 12.40

Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Average return for Treasury bills % = 8.11%
Average annual inflation rate % = 9.21%

Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation of Treasury bills %
Standard deviation of inflation %

Calculate the real return for each year. (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.)

Year Real return
1 %
2 %
3 %
4 %
5 %
6 %
7 %
8 %

What is the average real return for Treasury bills? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return for Treasury bills %

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