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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 3.97% 4.53% 14.45 4.90 19.09 3.82 --14.59 6.97 -32.08 4.96 37.34 6.35 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 98 Large-company stocks T-bills b. Large-company stocks T-bulls c-1. Average risk premium c-2. Standard deviation % 96 % %

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