The following return series comes from Global Financial Data.

A) Calculate the average nominal return earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)

B) Using the approximate fisher equation, calculate the average real return earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)

C) Calculate the average risk premium earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)

D) Calculate the average real risk premium earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)

E) Calculate the average risk premium earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)

F) Calculate the average rate of inflation. (Enter percentages as decimals and round to 4 decimals)

Year Large Stocks LT Gov Bonds US T-bills CPI

(Risk-free) (Inflation)

1946 -8.18% 4.07% 0.38% 18.13%

1947 5.24% -1.15% 0.62% 8.84%

1948 5.10% 2.10% 1.06% 2.99%

1950 18.06% 7.02% 1.12% -2.07%

1951 30.58% -1.44% 1.22% 5.93%