Security	Annual Percentage Return
U.S. government T-bills	3.04
Long-term government bonds	5.75
Long-term corporate bonds	6.80
Large capitalization common stocks	13.50
Small capitalization common stocks	15.60

The annual rate of inflation is 2%.

PLEASE SHOW THE WORK

a. Refer to Exhibit 3.1. What is the real return on long-term corporate bonds?

b. Refer to Exhibit 3.1. What is the T-bill nominal return?

c. Refer to Exhibit 3.1. What is the real return on small capitalization stocks?

d. Refer to Exhibit 3.1. What is the large company stock nominal return?

e. Briefly discus the difference between real and nominal returns.