Question: INTRO: Below is the returns for different asset classes for a particular year: Asset Class Return T-Bills 3.1% Corporate Bonds 6% Small Company Stocks 15.1%

INTRO: Below is the returns for different asset classes for a particular year:

Asset Class Return
T-Bills 3.1%
Corporate Bonds 6%
Small Company Stocks 15.1%
Large Company Stocks 10.9%

The inflation rate was 2%.

1. What was the real return on corporate bonds?

2. What was the real return on small company stocks?

3. What was the real return on Treasury bills?

4. What was the real risk premium for corporate bonds?

5. What was the real risk premium for small company stocks?

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