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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
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 3.91 14.35 19.29 -14.39 -31.88 37.00 US Treasury Bill 5.87 2.51 3.74 7.15 5.34 5.39 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average returns Large company stocks T-bills % % b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Large company stocks T-bills Standard deviation % % 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? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average risk premium % 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. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation %
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