Problem 2-09

You are given the following long-run annual rates of return for alternative investment instruments:

U.S. Government T-bills	3.50	%
Large-cap common stock	11.80	%
Long-term corporate bonds	5.85	%
Long-term government bonds	4.50	%
Small-capitalization common stock	13.15	%

The annual rate of inflation during this period was 3 percent. Compute the real rate of return on these investment alternatives. Do not round intermediate calculations. Round your answers to two decimal places.

	Real Rate of Return
U.S. Government T-bills:	?%
Large-cap common stock:	?%
Long-term corporate bonds:	?%
Long-term government bonds:	?%
Small-capitalization common stock:	?%