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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
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% 6.56% 2 14.46 4.40 3 19.15 4.27 4 -14.53 7.31 5 -32.02 5.20 37.41 6.37 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.)
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