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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