Here are annual stock market, Government of Canada bond, and Treasury bill rates of return from 20

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Here are annual stock market, Government of Canada bond, and Treasury bill rates of return from 20 10 to 20 14:
Government Long Bond T-Bill Return Year TSX Return Return .0064 0317 2010 .2215 2011 -.0812 .0093 0276 .0096 2012 .0187

a. What were the risk premiums on the TSX and on long·tern1 government bonds in each year?
b. What were the average risk premiums for the TSX and long-term government bonds?
c. Calculate the standard deviation of each risk premium using the approach in Table 11.4. Do they make sense?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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