The inflation rate in the United States has averaged 3% a year since 1900. What was the

Question:

The inflation rate in the United States has averaged 3% a year since 1900. What was the average real rate of return on Treasury bills, Treasury bonds, and common stocks in that period? Use the data in Table 11.1.

Average Premium (Extra return versus Treasury bills) Average Annual Portfolio Rate of Return Treasury bills Treasury bonds 3.8% 5.3 1.5% Common stocks 11.5 7.7

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...

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