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Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period Year 1 2 3 4 5 6 Large Company

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Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period Year 1 2 3 4 5 6 Large Company US Treasury Bill 3.68% 4.72% 14.15 3.57 19.19 4.16 - 14.49 5.90 -31.98 5.24 37.43 6.18 DE 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.) 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.) a. % % Large-company stocks T-bills b. Largo-company stocks T-bills 1. Average risk premium 02 Standard deviation RRR %

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