Refer to table 10.1 in the text and look at the period from 1973 through 1980. (a)

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Refer to table 10.1 in the text and look at the period from 1973 through 1980.

(a) Calculate the average return for treasury bills and the average annual inflation rate (consumer price index) for this period.

(b) Calculate the standard deviation of Treasury bill returns and inflation over this time period.

(d) Many people consider Treasury bills to be risk-free. What does this tell you about the potential risks of Treasury bills?

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Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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Question Posted: Apr 24, 2012 07:42 AM

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Refer to table 10.1 in the text and look at the period from 1973 through 1980. (a)

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To find the real return we need to use the Fisher equation Rewriting the Fisher equation to solve fo...View the full answer

Essentials Of Corporate Finance

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