Question: The following table shows the nominal returns on the U.S. stocks and the rate of inflation. a. What was the standard deviation of the market

The following table shows the nominal returns on the U.S. stocks and the rate of inflation.

a. What was the standard deviation of the market returns?

b. Calculate the average realreturn.

The following table shows the nominal returns on the U.S.

Year 2004 2005 2006 2007 2008 Nominal Return (%) +12.5 +6.4 +15.8 +5.6 37.2 Inflation (%) +3.3 +3.4 +2.5 +4.1 +0.1

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