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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 123456

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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 123456 3.96% 4.50% 14.12 4.88 19.01 3.80 -14.67 6.96 -32.16 4.88 6.14 a. 37.26 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.) 13

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