Refer to Table and look at the period from 1970 through 1975.

a. Calculate the average returns for large-company stocks and T-bills over this time period.

b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period.

c. 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? What was the standard deviation of the risk premium over this period?

d. Is it possible for the risk premium to be negative before an investment is undertaken? Can the risk premium be negative after the fact? Explain.

Year	Large Company Stocks	Long-Term Government Bonds	U.S. Treasury Bills	Consumer Price Index
1970	3.94%	18.92%	6.50%	5.57%
1971	14.30%	11.24%	4.36%	3.27%
1972	18.99%	2.39%	4.23%	3.41%
1973	-14.69%	3.30%	7.29%	8.71%
1974	-26.47%	4.00%	7.99%	12.34%
1975	37.23%	5.52%	5.87%	6.94%