Question: The inflation rate in Canada between 1926 and 2014 averaged 3.2%. What was the average real rate of return on Treasury bills, government bonds, and

The inflation rate in Canada between 1926 and 2014 averaged 3.2%. What was the average real rate of return on Treasury bills, government bonds, and common stocks in that period? Use the data in Table 11.1.

Average Annual Rate of Return Average Risk Premium (extra return versus Treasury bills) Portfolio Treasury bills Long-term government bonds Common stocks 4.28 5.84 1.56 8.33 4.05

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