Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large- Company US Treasury bills stocks 123456 3.69% 4.75% 14.48 3.59 19.27 4.18 -14.41 5.91 -31.90 5.32 37.51 6.41 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Large-company stocks % a. T-bills % b. Large-company stocks % b. T-bills % c-1. Average risk premium % c-2. Standard deviation % Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large- Company US Treasury bills stocks 123456 3.69% 4.75% 14.48 3.59 19.27 4.18 -14.41 5.91 -31.90 5.32 37.51 6.41 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c-2. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Large-company stocks % a. T-bills % b. Large-company stocks % b. T-bills % c-1. Average risk premium % c-2. Standard deviation %
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
If one movie ticket costs $13.50, how much will y tickets cost?
-
Using the information from PE 12-50, make the necessary journal entry to record the purchase of this held-to-maturity security.
-
When light with a wavelength of 221 nm is incident on a certain metal surface, electrons are ejected with a maximum kinetic energy of 3.28 10-19 J. Determine the wavelength (in nm) of light that...
-
Comparative Data Comparative stockholders' equity sections from two successive years of balance sheets from Kirkwood, Inc., are as follows: No dividends were declared or paid during 2018. Required...
-
Lighthouse Company divides its customers into Premium customers and Standard customers. The company has one full-time customer representative per 100 Premium customers and one full-time customer...
-
Some feel that an officer's most important weapon is their voice. How much do you agree with this statement? Choose a law enforcement communication/collaboration tactic that uses community policing...
-
What is the primary function of a loss control system? Assess risk, establish effective risk control measures, eliminate risk Establish effective risk control measures for hazardous conditions,...
-
Coronado Industries uses flexible budgets. At normal capacity of 2 4 0 0 0 units , budgeted manufacturing overhead is: $ 1 4 4 0 0 0 variable and $ 1 9 6 0 0 0 fixed . If Coronado had actual overhead...
-
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company s costing system and do what you can to...
-
Appraise if the following examples would be regarded as discrimination in hiring advertisements. Comment if they will be regarded as discriminative according to the Tripartite Alliances on Fair and...
-
Find x and y if [x +3 3y 1-4]
-
How do structural functionalist perspectives contribute to our understanding of social order and stability within complex societies ?
-
The New York Yankees offer multiyear luxury suite licenses to customers, including 3-, 5-, and 10-year licenses. Customers who sign these license agreements have the right to use a specified suite in...
-
Given the table below, about how much force does the rocket engine exert on the 4.0 kg payload? Distance traveled with rocket engine firing (m) Payload final velocity (m/s) 500 320 490 310 1020 450...
-
Using Rules 5.1, show that if \(x>0\) and \(y <0\) then \(x y <0\), and that if \(a>b>0\) then \(\frac{1}{a}
-
For which values of \(x\) is \(x^{2}+x+1 \geq \frac{x-1}{2 x-1}\) ?
-
For which values of \(x\) is \(-3 x^{2}+4 x>1\) ?
Study smarter with the SolutionInn App