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 for this period (Do not round intermediate calculations. Enter your answers as a percent rounded 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. Enter your answers as a percent rounded to 2 decimal places, e.g.. 12.16.) What was the average real return for Treasury bits over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations, Enter your answer as a percent rounded to 2 decimal places, e g., 32.16.)

Explanation / Answer

Years treasury bills inflation rate 1 8.11 9.83 2 8.92 13.36 3 6.74 7.87 4 5.88 5.61 5 6.32 7.63 6 8.57 10.1 7 11.55 14.32 8 13.21 13.77 Average return for treasury bills 8.6625 10.31125 standard deviation 2.572468242 3.226114 Real rate of return -1.64875 percent

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