Assume these are the stock market and Treasury bill returns for a 5-year period: YearStock Market Return

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Assume these are the stock market and Treasury bill returns for a 5-year period:

YearStock Market Return (%)T-Bill Return (%)201332.400.06201411.700.0620152.300.06201613.600.24201722.100.26

Required:

a.What was the risk premium on common stock in each year?

b.What was the average risk premium?

c.What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)

Posted Date: May 18, 2024 05:00 PM

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Assume these are the stock market and Treasury bill returns for a 5-year period: YearStock Market Return

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