Question
Year Large Company Stocks US Treasury Bill 1 3.67% 4.69% 2 14.32 3.55 3 19.11 4.14 4 -14.57 5.89 5 -32.06 5.16 6 37.35 5.33
Year | Large Company Stocks | US Treasury Bill |
1 | 3.67% | 4.69% |
2 | 14.32 | 3.55 |
3 | 19.11 | 4.14 |
4 | -14.57 | 5.89 |
5 | -32.06 | 5.16 |
6 | 37.35 | 5.33 |
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.) |
Large Company Stocks | 4.64% |
T-Bills | 4.79% |
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.) |
Large Company Stocks | _____ % |
T-Bills | _____ % |
c-1 | Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic 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.) |
Average risk premium | _____ % |
Standard deviation | _____ % |
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