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Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large- Company US Treasury bills stocks 1231
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large- Company US Treasury bills stocks 1231 3.88% 5.78% 14.31 2.45 19.05 3.68 4 -14.63 7.12 5 -32.12 4.92 6 37.29 4.89 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.) Prov
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