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Please check Problem 5-14 Full sample 19271951 1952-2018 Average Annual Rates T-Bills Inflation Real T-Bill 3.38 1.95 0.46 0.95 1.79 -0.47 4.26 3.46 0.81 T-Bills

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Problem 5-14 Full sample 19271951 1952-2018 Average Annual Rates T-Bills Inflation Real T-Bill 3.38 1.95 0.46 0.95 1.79 -0.47 4.26 3.46 0.81 T-Bills 3.12 1.24 3.13 Standard Deviation Inflation Real T-Bill 4.00 3.76 6.04 6.33 2.89 2.12 (1927-2018) Mean excess return (annualized) Standard deviation (annualized) Market Index 8.29 18.52 Big/ Growth 8.07 18.35 Big/ Value 11.69 24.70 Small/ Growth 8.99 26.06 Small/ Value 15.38 28.21 Suppose that the inflation rate is expected to be 1.95% in the near future using the data provided above, what would be your predictions for the following? (Round your answers to 2 decimal places.) a. The T-bill rate? 2.41% b. 14.10% The expected rate of return on the Big/Value portfolio? The risk premium on the stock market? C. Remains unchanged

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