Consider the following table for a period of six years: Returns U.S. Treasury Year Large-Company Stocks...

Transcribed Image Text:

Consider the following table for a period of six years: Returns U.S. Treasury Year Large-Company Stocks Bills 123456 -15.19% -26.62 7.39% 8.04 37.33 24.03 5.97 5.57 5.50 7.79 -7.36 6.67 a-1. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-1. Arithmetic average return a-2. Standard deviation Large-company stocks T-bills 3.11 % % 6.77 % % Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. b-1. What was the arithmetic average risk premium over this period? Note: 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. b-2. What was the standard deviation of the risk premium over this period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b-1. Average risk premium b-2. Risk premium standard deviation % Consider the following table for a period of six years: Returns U.S. Treasury Year Large-Company Stocks Bills 123456 -15.19% -26.62 7.39% 8.04 37.33 24.03 5.97 5.57 5.50 7.79 -7.36 6.67 a-1. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-2. Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. a-1. Arithmetic average return a-2. Standard deviation Large-company stocks T-bills 3.11 % % 6.77 % % Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. b-1. What was the arithmetic average risk premium over this period? Note: 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. b-2. What was the standard deviation of the risk premium over this period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b-1. Average risk premium b-2. Risk premium standard deviation %