Use the data in the tables below to answer the following questions Average rates

Question

Use the data in the tables below to answer the following questions Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2013 Average Premium (Extra return versus Treasury bills) Portfolio Treasury bills Treasury bonds Common stocks Average Annual Rate of Return 3.9 5.2 11.5 1.3 Standard deviation of returns, 1900-2013 Portfolio Treasury bills Long-term government bonds Common stocks Standard Deviation, % 2.8 8.9 19.9 a. What was the average rate of return on large U.S. common stocks from 1900 to 2013? (Enter your answer as a percent rounded to 1 decimal place.) Average rate of return b. What was the average risk premium on common stocks? (Enter your answer as a percent rounded to 1 decimal place.) Average risk premium c. What was the standard deviation of returns on common stocks? (Enter your answer as a percent rounded to 1 decimal place.) Standard deviation of returns

Explanation / Answer

From the information prvoided in the table,

average rate of return on large U.S common stocks = 11.5%

average risk premium on common stocks = 7.6%

Standard deviation of returns on common stocks = 19.9%

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

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