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Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year US Treasury bills UAWN 1 2 3 4

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Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year US Treasury bills UAWN 1 2 3 4 5 6 Large- Company stocks 3.90% 14.47 19.21 -14.47 -31.96 37.45 5.84% 2.49 3.72 7.14 5.26 6.39 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.) % a. Large-company stocks a. T-bills % % b. Large-company stocks b. T-bills % % c-1. Average risk premium C-2. Standard deviation %

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