Suppose we have the following returns for large-company stocks and Treasury bills over a six year period:

Year

Large Company

US Treasury Bill

1

3.96

4.50

2

14.12

4.88

3

19.01

3.80

4

14.67

6.96

5

32.16

4.88

6

37.26

6.14

a.	Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Average returns

Large company stocks

%

T-bills

%

b.	Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation

Large company stocks

%

T-bills

%

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? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Average risk premium

%

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. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Standard deviation

%