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Problem 10-8 Risk Premiums [LO 2] Consider the following table for a period of six years 695 Year 1 Year 2 YRA 3 Returns Large
Problem 10-8 Risk Premiums [LO 2] Consider the following table for a period of six years 695 Year 1 Year 2 YRA 3 Returns Large Company US Stocks Treasury Bits 7535 - 26.98 8.16 27.57 24.27 - 74 6.91 8.15 Requirement 1: Calculate the arithmetic averape retums for large borrany slocks and bills over this time period. (Do not round Intermediate calculations. Enter your answers 00 percentage rounded to 2 decimal places (eg 32.16).) - Telkommons Arithmetic everage returns Large-company stock T-bills Requirement 2: Calculate the standard deviation of the returns for large company locks 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).) Seandard deviation Large-winary stack T-bills Requirement 3: Calculate the abserved risk premium in each year for the large company stocks versus the Taills (a) What was the arithmetic average premium over this period? Negative amount should be indicated by a mine sign. Do not round Intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places ( eg. 32.169) Risk premium b) What was the standard deviation of the risk pramum over this period? Do not round Intermediate calculations. Enter your answers a percentage rounded to 2 decimal places eg. 32.16)) Risk premium standard devlon
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