Question: Hello, I need a little help figuring out the answer to this homework problem. Can someone help me? Problem 10-8 Risk Premiums Suppose we have

Hello,

I need a little help figuring out the answer to this homework problem. Can someone help me?

Hello, I need a little help figuring out the answer to this

Problem 10-8 Risk Premiums Suppose we have the following returns for large-company stocks and Treasury bills over a six year period arge Company 3.66 14.44 19.03 -14.65 -32.14 37.27 Treasury Bill 4.66 2.33 4.12 5.88 4.90 6.33 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Average returns Large company stocks T-bills b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places (e.g., 32.16).) Standard deviation Large company stocks T-bills c-1 Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Average risk premium 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. Enter your answer as a percent rounded to 2 decimal places (e.g., 32.16).) Standard deviation

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!