Question
Suppose we have the following Treasury bill returns and inflation rates over an eight year period: Year Treasury Bills Inflation 1 10.15 12.25 2 11.05
Suppose we have the following Treasury bill returns and inflation rates over an eight year period: |
Year | Treasury Bills | Inflation |
1 | 10.15 | 12.25 |
2 | 11.05 | 15.67 |
3 | 8.76 | 9.98 |
4 | 8.05 | 7.69 |
5 | 8.58 | 9.98 |
6 | 10.92 | 12.45 |
7 | 13.79 | 16.65 |
8 | 15.63 | 16.55 |
|
a. | Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Round your answers to 2 decimal places. (e.g., 32.16)) |
Treasury bills | % |
Inflation | % |
|
b. | Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) |
Treasury bills | % |
Inflation | % |
|
c. | What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) |
Average real return | % |
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