Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return T-Bill...

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Finance

Assume these are the stock market and Treasury bill returns fora 5-year period:
YearStock Market ReturnT-Bill Return
  Year 1?35.733.10
  Year 230.101.50
  Year 315.56.21
  Year 42.38.06
  Year 518.26.08
a.

What was the risk premium on common stock in each year?(Negative amounts should be indicated by a minus sign. Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)

Year  Risk premium
Year 1%  
Year 2%  
Year 3%  
Year 4%  
Year 5%  
b.

What was the average risk premium? (Do not roundintermediate calculations. Enter your answer as a percent roundedto 2 decimal places.)

  Average risk premium%  
c.

What was the standard deviation of the risk premium? (Donot round intermediate calculations. Enter your answer as a percentrounded to 2 decimal places.)

  Standard deviation%  

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Transcribed Image Text

Assume these are the stock market and Treasury bill returns fora 5-year period:YearStock Market ReturnT-Bill Return  Year 1?35.733.10  Year 230.101.50  Year 315.56.21  Year 42.38.06  Year 518.26.08a.What was the risk premium on common stock in each year?(Negative amounts should be indicated by a minus sign. Donot round intermediate calculations. Enter your answers as apercent rounded to 2 decimal places.)Year  Risk premiumYear 1%  Year 2%  Year 3%  Year 4%  Year 5%  b.What was the average risk premium? (Do not roundintermediate calculations. Enter your answer as a percent roundedto 2 decimal places.)  Average risk premium%  c.What was the standard deviation of the risk premium? (Donot round intermediate calculations. Enter your answer as a percentrounded to 2 decimal places.)  Standard deviation%  

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