Hi, wanted to double check answers and needed help! Consider the following table
ID: 2657249 • Letter: H
Question
Hi, wanted to double check answers and needed help!
Consider the following table for a period of six years Returns U.S. Treasury Bills Year 2 4 6 Large-Company Stocks -14.89% -26.53 37.27 23.97 8.01 5.91 5.27 5.47 7.70 6.61 Calculate the arithmetic average returns for large-company stocks and T-bills over this time period (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average returns Large-company stock T-bills 3.20 % 6.62 % Calculate the standard deviation of the returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation Large-company stock T-bills Calculate the observed risk premium in each year for the large-company stocks versus the T-bills a. What was the arithmetic 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.) Average risk premium -3.42 % b. 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.) Risk premium standard deviationExplanation / Answer
Year
large company stock
US treasury bills
1
-14.89
7.33
2
-26.53
8.01
3
37.27
5.91
4
23.97
5.27
5
-7.24
5.47
6
6.61
7.7
Arithmatic average =Using average function in MS excel
3.20
6.62
standard deviation =Using stdev function in MS excel
22.08
1.10
Year
large company stock
US treasury bills
risk premium =large company return-treasury bills return
1
-14.89
7.33
-22.22
2
-26.53
8.01
-34.54
3
37.27
5.91
31.36
4
23.97
5.27
18.7
5
-7.24
5.47
-12.71
6
6.61
7.7
-1.09
Arithmatic average of risk premium =Using average function in MS excel
-3.42
standard deviation of risk premium=Using stdev function in MS excel
22.78
Year
large company stock
US treasury bills
1
-14.89
7.33
2
-26.53
8.01
3
37.27
5.91
4
23.97
5.27
5
-7.24
5.47
6
6.61
7.7
Arithmatic average =Using average function in MS excel
3.20
6.62
standard deviation =Using stdev function in MS excel
22.08
1.10
Year
large company stock
US treasury bills
risk premium =large company return-treasury bills return
1
-14.89
7.33
-22.22
2
-26.53
8.01
-34.54
3
37.27
5.91
31.36
4
23.97
5.27
18.7
5
-7.24
5.47
-12.71
6
6.61
7.7
-1.09
Arithmatic average of risk premium =Using average function in MS excel
-3.42
standard deviation of risk premium=Using stdev function in MS excel
22.78
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