Question: Below are the returns for different asset classes for a particular year: Asset class Return T-bills 3.7% Corporate bonds 5.5% Small company stocks 17.3% Large

Below are the returns for different asset classes for a particular year:

Asset class Return
T-bills 3.7%
Corporate bonds 5.5%
Small company stocks 17.3%
Large company stocks 11.5%

The inflation rate was 1.9%.

Part 1

What was the real return on corporate bonds?

Part 2

What was the real return on small-company stocks?

Part 3

What was the real return on Treasury bills?

Part 4

What was the real risk premium for corporate bonds?

Part 5

What was the real risk premium for small company stocks?

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