3. Consider the following information onlarge-company stocks from 1926 through 2

Question

3.

Consider the following information onlarge-company stocks from 1926 through 2008.

Series

Arithmetic Mean

What was the arithmetic average annual return in nominal terms? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

What was the arithmetic average annual return in real terms? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

4.

Consider the following table for the period from 1973 through 1978.

Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

Calculate the standard deviation of the returns for large-company stocks and T-bills over this period. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills.

What was the arithmetic average risk premium over this period? (Negative amount should be indicated by a minus sign. Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

What was the standard deviation of the risk premium over this period? (Do not include the percent sign (%). Round your answer to 2 decimal places. (e.g., 32.16))

You

Consider the following information onlarge-company stocks from 1926 through 2008.

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