Refer to Table 12.1 and look at the period from 1970 through 1975. a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period? (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.) c-2. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. a. Large-company stocks a. T-bills b. Large-company stocks b. T-bills c-1. Average risk premium c-2. Standard deviation 3.00 % 4.00 X % 6.00 X % 33.00 % 44.00 X % 25.00 X % TABLE 12.1 Year-to-Year Total Returns: 19262019 Large- Company Stocks Long-Term Government Bonds U.S. Treasury Bills Consumer Price Index Year 1926 11.62% 7.77% 3.27% -1.49% 1927 37.49 8.93 3.12 -2.08 1928 43.61 .10 3.56 -97 1929 -8.42 3.42 4.75 .20 1930 -24.90 4.66 2.41 -6.03 1931 -43.34 1.07 -9.52 -5.31 16.84 1932 -8.19 .96 -10.30 1933 53.99 -07 .30 .51 1934 -1.44 10.03 .16 2.03 1935 47.67 4.98 .17 2.99 1936 33.92 7.52 .18 1.21 1937 -35.03 .23 .31 3.10 1938 31.12 5.53 -02 -2.78 1939 -41 5.94 .02 -.48 1940 -9.78 6.09 .00 .96 1941 -11.59 .93 .06 9.72 1942 20.34 3.22 .27 9.29 1943 25.90 2.08 .35 3.16 1944 19.75 2.81 .33 2.11 1945 36.44 10.73 .33 2.25 1946 -8.07 -.10 .35 18.16 1947 5.71 -2.62 .50 9.01 1948 5.50 3.40 .81 2.71 1949 18.79 6.45 1.10 -1.80 1950 31.71 .06 1.20 5.79 1951 24.02 -3.93 1.49 5.87 1952 18.37 1.16 1.66 .88 1953 -.99 3.64 1.82 .62 1954 52.62 7.19 .86 -.50 1955 31.56 -1.29 1.57 .37 1956 6.56 -5.59 2.46 2.86 1957 -10.78 7.46 3.14 3.02 1958 43.36 -6.09 1.54 1.76 1959 11.96 -2.26 2.95 1.50 1960 .47 13.78 2.66 1.48 1961 26.89 .97 2.13 .67 1962 -8.73 6.89 2.73 1.22 1963 22.80 1.21 3.12 1.65 1964 16.48 3.51 3.54 1.19 1965 12.45 .71 3.93 1.92 1966 -10.06 3.65 4.76 3.35 1967 23.98 -9.18 4.21 3.04 1968 11.06 -.26 5.21 4.72 1969 -8.50 -5.07 6.58 6.11 1970 3.86 12.11 6.32 5.49 1971 14.30 13.23 4.39 3.36 1972 19.00 5.69 3.84 3.41 1973 -14.69 -1.11 6.93 8.80 1974 -26.47 4.35 8.00 12.20 1975 37.23 9.20 5.80 7.01 1976 23.93 16.75 5.08 4.81 1977 -7.16 -.69 5.12 6.77 1978 6.57 -1.18 7.18 9.03 1979 18.61 -1.23 10.38 13.31 1980 32.50 -3.95 11.24 12.40 1981 -4.92 1.86 14.71 8.94 1982 21.55 40.36 10.54 3.87 1983 22.56 .65 8.80 3.80 1984 6.27 15.48 9.85 3.95 1985 31.73 30.97 7.72 3.77 1986 18.67 24.53 6.16 1.13 1987 5.25 -2.71 5.47 4.41 1988 16.61 9.67 6.35 4.42 1989 31.69 18.11 8.37 4.65 1990 -3.10 6.18 7.81 6.11 1991 30.47 19.30 5.60 3.06 1992 7.62 8.05 3.51 2.90 1993 10.08 18.24 2.90 2.75 1994 1.32 -7.77 3.90 2.67 1995 37.58 31.67 5.60 2.54 1996 22.96 -93 5.21 3.32 1997 33.36 15.85 5.26 1.70 1998 28.58 13.06 4.86 1.61 1999 21.04 -8.96 4.68 2.68 2000 -9.10 21.48 5.89 3.39 2001 -11.89 3.70 3.83 1.55 2002 -22.10 17.84 1.65 2.38 2003 28.68 1.45 1.02 1.88 2004 10.88 8.51 1.20 3.26 2005 4.91 7.81 2.98 3.42 2006 15.79 1.19 4.80 2.54 2007 5.49 9.88 4.66 4.08 2008 -37.00 25.87 1.60 .09 2009 26.46 -14.90 .10 2.72 2010 15.06 10.14 .12 1.50 2011 2.11 27.10 .04 2.96 2012 16.00 3.43 .06 1.74 2013 32.39 -12.78 .02 1.51 2014 13.69 24.71 .02 .76 2015 1.38 -.65 .02 .73 2016 11.96 1.75 .20 2.07 2017 21.83 6.24 .80 2.11 2018 -4.38 -.57 1.81 1.91 2019 31.49 12.16 2.14 2.29