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The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills (Rf asset) CPI (inflation) 2016 12.95% 2.35% 0.20%

The following return series comes from Global Financial Data.

Year

Large Stocks

LT Gov Bonds

US T-bills

(Rf asset)

CPI

(inflation)

2016

12.95%

2.35%

0.20%

1.90%

2017

18.63%

5.75%

0.60%

1.80%

2018

-5.28%

-1.25%

0.80%

2.10%

2019

25.45%

3.35%

1.20%

1.10%

2020

19.12%

9.30%

1.50%

2.10%

Using the approximate fisher equation, calculate the average real risk premium earned on long-term government bonds. (Enter percentages as decimals and round to 4 decimals)

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