Which rate of return in the table is the risk-free rate?

The real return equals the nominal returns less the inflation rate of 3.2 percent.

Which rate of return in the table is the risk-free rate?

Treasury bills are risk-free assets because they have a short-term maturity date, their price is less volatile, and there is no chance of default on them. True or False

Securities Large-company stocks Small-company stocks Corporate bonds Government bonds U.S. Treasury bills Inflation Nominal Average Annual Returns 11.7% 17.4% 6.2% 5.2% 3.7% 3.2% Standard Deviation Real Average Annual of Returns Returns (*) 20.0% 8.5% 33.0% 14.2% 8.5% 3.0% 5.7% 2.0% 3.1% 0.5% 4.3% Risk Premium 8.0% 13.7% 2.5% 1.5% 0.0%