Question: Problem 7.2 Standard Deviation of Returns The following table shows the nominal returns on the US stocks and the rate of inflation. Nominal Return(%) Inflation(%)

Problem 7.2 Standard Deviation of Returns The following table shows the

Problem 7.2 Standard Deviation of Returns The following table shows the nominal returns on the US stocks and the rate of inflation. Nominal Return(%) Inflation(%) +3.3 +3.4 Year 2004+12.5 2005 +6.4 2006+158 2007 +5.6 2008 372 +2.5 +4.1 +0.1 Part a: What is the standard deviation of the market returns? Part b: Calculate the average (or expected value) real return

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