Question

Suppose we have the following Treasury bill returns and inflation rates over an eight-year period: |

Year | Treasury Bills | Inflation |

1 | 10.45% | 12.55% |

2 | 11.36 | 16.00 |

3 | 9.06 | 10.29 |

4 | 8.34 | 7.97 |

5 | 8.88 | 10.29 |

6 | 11.23 | 12.77 |

7 | 14.11 | 16.98 |

8 | 15.97 | 16.90 |

a. |
Calculate the average return for Treasury bills and the average
annual inflation rate for this period. |

b. |
Calculate the standard deviation of Treasury bill returns and
inflation over this period. (Do not round intermediate
calculations and enter your answers as a percent rounded to 2
decimal places, e.g., 32.16.) |

c. |
What was the average real return for Treasury bills over this
period? (A negative answer should be indicated by a minus
sign. Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.) |

Answer #1

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
3.66
4.66
2
14.44
2.33
3
19.03
4.12
4
–14.65
5.88
5
–32.14
4.90
6
37.27
6.33
a.
Calculate the arithmetic average returns for large-company
stocks and T-bills over this period. (Do not round
intermediate calculations. Enter your answers as a percent rounded
to 2 decimal places, e.g., 32.16.)
Average
returns
Large company
stocks
%
T-bills...

A and B are already correct, I just need Part C
:)
Suppose we have the following Treasury bill returns and
inflation rates over an eight year period:
Year
Treasury
Bills
Inflation
1
10.77%
13.17%
2
11.69
16.35
3
9.38
10.62
4
8.65
8.27
5
9.20
10.62
6
11.56
13.11
7
14.45
17.33
8
16.33
17.27
a....

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the period was 4.3 percent.
a. What was the average real risk-free rate over this time
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average inflation rate over this period was 2.7 percent and the
average T-bill rate over the period was 4.8 percent.
What was the average real risk-free rate over this time period?
(Do not round intermediate calculations and enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
What was...

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average T-bill rate over the period was 3 percent.
What was the average real risk-free rate over this time period?
(Do not round intermediate calculations and enter your answer as a
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What...

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percent, 3.7 percent, and 22.7 percent. The average inflation rate
over this period was 3.37 percent and the average T-bill rate over
the period was 4.3 percent. What was the average real risk-free
rate over this time period? (Do not round intermediate calculations
and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.) Average real risk-free rate...

You’ve observed the following returns on Barnett Corporation’s
stock over the past five years: –28.5 percent, 16 percent, 35
percent, 3.5 percent, and 22.5 percent. The average inflation rate
over this period was 3.35 percent and the average T-bill rate over
the period was 4.3 percent.
What was the average real risk-free rate over this time period?
(Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Average real risk-free rate...

You’ve observed the following returns on Barnett Corporation’s
stock over the past five years: –25.5 percent, 14 percent, 31
percent, 2.5 percent, and 21.5 percent. The average inflation rate
over this period was 3.25 percent and the average T-bill rate over
the period was 4.3 percent.
a. What was the average real return on the
stock? (Do not round intermediate calculations and enter
your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Average real return
%
b....

You’ve observed the following returns on SkyNet Data
Corporation’s stock over the past five years: 12 percent, –9
percent, 20 percent, 17 percent, and 10 percent. Suppose the
average inflation rate over this period was 3.2 percent and the
average T-bill rate over the period was 4.9 percent. What was the
average real risk-free rate over this time period? (Do not round
intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.) What was...

You’ve observed the following returns on Yasmin Corporation’s
stock over the past five years: 14 percent, –7 percent, 17 percent,
15 percent, and 10 percent. Suppose the average inflation rate over
this period was 1.4 percent and the average T-bill rate over the
period was 5.1 percent.
What was the average real risk-free rate over this time period?
(Do not round intermediate calculations. Enter your answer
as a percent rounded to 2 decimal places, e.g.,
32.16.)
Average real risk-free rate ...

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