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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 3.69% 4.75% 14.48 3.59 19.27 4.18 -14.41 5.91 - 31.90 5.32 37.51 6.41 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.) a. Large-company stocks % T-bills % b. % Large-company stocks T-bills % C-1. Average risk premium % C-2. Standard deviation %

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