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Suppose we have the following returns for large-company stocks and Treasury bills over a six-period: Year                        &nbsp

Suppose we have the following returns for large-company stocks and Treasury bills over a six-period:

Year                          Large Company                      US Treasury Bill

1

3.88%

5.78%
2 14.31 2.45
3 19.05 3.68
4 -14.63 7.12
5 -32.12 4.92
6 37.29

4.89

a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period.( Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places.)

b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. ( Do not round intermediate calculations and enter your answers as a percent to 2 decimal places.)

c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average premium over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.)

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? ( Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places.)

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