Consider the following rates of return: Year / Large Company Stocks / US Treasury Bill 1...

Consider the following rates of return: Year / Large Company Stocks / US Treasury Bill 1 3.99 % 4.59 % 2 14.16 4.94 3 19.25 3.86 4 –14.43 6.99 5 –31.92 5.30 6 37.49 6.20 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. c-1 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? c-2 Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period?

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jeff jeffy answered 4 months ago

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