# Question: Refer to Table 10 1 in the text and look at

Refer to Table 10.1 in the text and look at the period from 1973 through 1978.

a. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period.

b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period.

c. 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? What was the standard deviation of the risk premium over this period?

Table 10.1

a. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period.

b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period.

c. 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? What was the standard deviation of the risk premium over this period?

Table 10.1

**View Solution:**## Answer to relevant Questions

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 19 percent, – 13 percent, 24 percent, 31 percent, and 8 percent. a. What was the arithmetic average return on Yasmin’s ...Stock Y has a beta of 1.35 and an expected return of 14.2 percent. Stock Z has a beta of .75 and an expected return of 9.1 percent. If the risk-free rate is 4.3 percent and the market risk premium is 7 percent, are these ...You have been provided the following data on the securities of three firms, the market portfolio, and the risk-free asset: *With the market portfolio. a. Fill in the missing values in the table. b. Is the stock of Firm A ...Assume stocks A and B have the following characteristics: The covariance between the returns on the two stocks is .01. a. Suppose an investor holds a portfolio consisting of only stock A and stock B. Find the portfolio ...An all-equity firm is considering the following projects: The T-bill rate is 5 percent, and the expected return on the market is 11 percent. a. Which projects have a higher expected return than the firm’s 11 percent cost ...Post your question