Suppose we have the following Treasury bill returns and inflation rates over an

Question

Suppose we have the following Treasury bill returns and inflation rates over an eight year period:

Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Round your answers to 2 decimal places. (e.g., 32.16))

Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))

   

What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))

Year Treasury Bills Inflation 1 11.11            13.91            2 12.04            16.72            3 9.72            10.97            4 8.98            8.59            5 9.54            10.97            6 11.91            13.47            7 14.81            17.70            8 16.71            17.66           

Explanation / Answer

a)

Average return Treasury bills% = 11.85%

Average return Inflation%= 13.75%

b)

standard deviation Treasury bills% = 2.70%

standard deviation Inflation%= 3.42%

c

Average real return = -1.65%

Year Treasury Bills Inflation 1 11.11% 13.91% 2 12.04% 16.72% 3 9.72% 10.97% 4 8.98% 8.59% 5 9.54% 10.97% 6 11.91% 13.47% 7 14.81% 17.70% 8 16.71% 17.66% Average 11.85% 13.75% Std Deviation 2.70% 3.42%

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.