Question
Year Large Stocks LT Gov Bonds US T-bills (Rf asset) CPI (inflation) 1984 31.73% 16.53% 9.90% 3.80% 1985 18.67% 39.03% 7.71% 1.10% 1986 5.25% 32.51%
| Year | Large Stocks | LT Gov Bonds | US T-bills (Rf asset) | CPI (inflation) |
| 1984 | 31.73% | 16.53% | 9.90% | 3.80% |
| 1985 | 18.67% | 39.03% | 7.71% | 1.10% |
| 1986 | 5.25% | 32.51% | 6.09% | 4.43% |
| 1987 | 16.61% | -8.09% | 5.88% | 4.20% |
| 1988 | 31.69% | 8.71% | 6.94% | 4.65% |
The following return series comes from Global Financial Data.
A.) 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)
B.) Calculate the average risk premium earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
10th edition
978-1337902571, 1337902578, 978-1337911054, 1337911054, 978-0324272055
