Problem 10-8 Risk Premiums [LO 2] Consider the following table for a period of six years. Yeart Year 2 Rotune Large Company US Stocks Treasury Bits - 15.00 7375 -25.50 8.00 5.95 5.47 - 712 5:49 565 7.76 Year Year 4 Year 5 Year 2001 Requirement 1: Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Arithmetic vege Large-company stock Tbile Requirement : Calculate the standard deviation of the retums for large- company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Large-company stock T-bile Standard deviation 2166 Requirement 3: Calculate the observed risk premium in each year for the large- company stocks versus the T-bills. WWhat 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 a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium -5.18 OS as What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g.. 32.16).) Risk premium standard deviation 2239 Problem 10-8 Risk Premiums [LO 2) Consider the following table for a period of six years. Returns Large-Company US Your Stocks Treasury Bits Yeart -- 15.00% 7.37% - 26.59 8.00 Year 3 37.31 5.95 Year 4 24.01 5.47 Year 5 - 732 5.49 Year 6.65 7.70 Year 2 Requirement 1: Calculate the arithmetic average retums for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Arithmeticaverage retum Largo-company stock T-bille 6.68 Requirement 2: Calculate the standard deviation of the returns for large- company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Standard deviation Largo-company stock T-bills Requirement 3: 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 percentage rounded to 2 decimal places (e.g.. 32.16).) Risk premium What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Risk premium standard deviation