Calculate the arithmetic average returns for large-company stocks and T-bills ov

Question

Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period.(Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the standard deviation of the risk premium over this period? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Explanation / Answer

Arithmetic average returns
Large-company stock %   = (14.89+26.53+37.27+23.97+7.24+6.61)/6= 19.42%
T-bills %                            =(7.33+8.01+5.91+5.27+5.47+7.70)/6= 6.42%

Standard deviation
Large-company stock %    =13.02%  
T-bills %                             =1.44%

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