Question
Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock...
Assume these are the stock market and Treasury bill returns for a 5-year period:
| Year | Stock Market Return (%) | T-Bill Return (%) | ||||||
| 2013 | 32.50 | 0.07 | ||||||
| 2014 | 11.80 | 0.07 | ||||||
| 2015 | −2.40 | 0.07 | ||||||
| 2016 | 13.70 | 0.25 | ||||||
| 2017 | 22.40 | 0.27 | ||||||
Required:
a. What was the risk premium on common stock in each year?
b. What was the average risk premium?
c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)
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a. What was the risk premium on common stock in each
year? (Do not round intermediate calculations.
Enter your answers as a percent rounded to 2 decimal
places.)
b. What was the average risk premium? (Do not round intermediate
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Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock...
Assume these are the stock market
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What was the risk premium on common stock in each year?
(Negative amounts should be indicated by a minus sign. Do
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