Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

image text in transcribedimage text in transcribed

Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Company Large Company 3.68% 14.15 19.19 -14.49 - 31.98 37.43 US Treasury Bill 4.72% 3.57 4.16 5.90 5.24 6.18 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- 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 T-bills b. Large-company stocks T-bills C-1. Average risk premium Standard deviation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Save It Fix Your Finances

Authors: Bola Sol

1st Edition

1529118816, 978-1529118810

More Books

Students also viewed these Finance questions

Question

1. Describe the key business processes used by your venture.

Answered: 1 week ago