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. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) |
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.) |
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