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Problem 10-8 Risk Premiums [LO 2] Consider the following table for a period of six years. Year Year 1 Year 2 Year Year 4 Years

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Problem 10-8 Risk Premiums [LO 2] Consider the following table for a period of six years. Year Year 1 Year 2 Year Year 4 Years Year 6 Returns Large-Company US Stocks Treasury - 15.099 7.37% -25.59 8.03 3731 595 24.01 547 - 732 5.4 6.65 7.76 Requirement 1: Calculate the arithmetic average returns for large-company stocks 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).) Arithmetica re Large company stock T- Requirement 2: Calculate the standard deviation of the retums for large- company stocks 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).) Standard deviation Large company stock T-bile Requirement 3: Calculate the observed risk premium in each year for the large- company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium sturidad devotion s

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