Business
Business, 16.11.2020 18:10, okayokayokay3855

Suppose we have the following returns for large-company stocks and Treasury bills over a six year period: Year Large Company US Treasury Bill
1 3.89 5.81
2 14.14 2.47
3 19.13 3.7
4 -14.55 7.13
5 -32.04 5.18
6 37.37 6.16

Required:
a. Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period?
b. Calculate the arithmetic average returns for large-company stocks and T-bills over this period.
c. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.

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