Suppose these are the inflation rates and returns on the stock market and Treasury bills from 1929 to 1933:

Year	Inflation	Stock Return	Promissory Notes
1929	.3	–14.5	5.1
1930	–5.5	–31.8	2.5
1931	–8.4	–48.5	1.2
1932	–11.0	–8.5	.8
1933	.6	63.0	.5

A. What was the actual return on the stock market each year? (Negative answers should be marked with a minus sign. Do not round up intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places.)

Year	Real Return
1929	%
1930	%
1931	%
1932	%
1933	%

B. What was the arithmetic mean true return? (A negative answer should be marked with a minus sign. Do not round off intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Average percentage of real return

C. What was the risk premium each year? (Negative answers should be marked with a minus sign. Enter your answers as a percentage rounded to 2 decimal places.)

Year	Risk Primi
1929	%
1930	%
1931	%
1932	%
1933	%

D. What was the average risk premium? (A negative answer should be marked with a minus sign. Do not round off intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Average risk premium %

to. What was the standard deviation of the risk premium? (Do not adjust the degrees of freedom explained in Footnote 18.) (Use decimal places, not percentages in your calculations. Do not round up intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places.)

Answer rating: 100% (QA)

A The actual return on the stock market each year can be calculated as follows Year Real Return 1929 ... View the full answer