Question

Average Annual Rates Standard Deviation T-Bills Inflation Real T-Bill T-Bills Inflation Real T-Bill All months 3.46...

Average Annual Rates Standard Deviation
T-Bills Inflation Real T-Bill T-Bills Inflation Real T-Bill
All months 3.46 2.05 0.56 3.12 4.07 3.81
First half 1.04 1.68 ? 0.29 1.29 5.95 6.27
Recent half 4.45 3.53 0.90 3.11 2.89 2.13
(1926-2016) Market
Index
Big/
Growth
Big/
Value
Small/
Growth
Small/
Value
Mean excess return (annualized) 0.83 7.98 11.67 8.79 15.56
Standard deviation (annualized) 18.64 18.50 24.62 26.21 28.36

Using the data provided above, what would be your predictions for the following? (Round your answers to 2 decimal places.)

a.The T-bill rate? %

b.The expected rate of return on the Big/Value portfolio? %

c.The risk premium on the stock market?

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