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Year Large Company US Treasury Bill 1    3.90% 5.84% 2   14.47 2.49 3   19.21 3.72 4...

Year Large Company US Treasury Bill
1    3.90% 5.84%
2   14.47 2.49
3   19.21 3.72
4 –14.47 7.14
5 –31.96 5.26
6   37.45 6.39

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, e.g., 32.16.)
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 rounded to 2 decimal places, e.g., 32.16.)
c-1. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk 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, e.g., 32.16.)
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, e.g., 32.16.)

I am very confused I have tried this many times but I am not sure if I am correct please show step by step and I will Rate!
Thank you!

a. Large-company stocks 4.77 %
T-bills 5.14 %
b. Large-company stocks 22.70 %
T-bills 1.59 %
c-1. Average risk premium -0.37 %
c-2. Standard deviation 23.30 %

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Expert Solution

jeff jeffy answered 1 year ago
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