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))

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

Explanation / Answer

a.) Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period.

Treasury bills 8.298%
Inflation 9.95%

b.) Calculate the standard deviation of Treasury bill returns and inflation over this period.

Treasury bills 2.5%
Inflation 3.2%

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