Look at the period from 1970 through 1975:

Index	Large Company Stocks	Long Term Government Bonds	US Treasury Bills	Consumer Price Index
1970	3.94	18.92	6.5	5.57
1971	14.3	11.24	4.36	3.27
1972	18.99	2.39	4.23	3.41
1973	-14.69	3.3	7.29	8.71
1974	-26.47	4	7.99	12.34
1975	37.23	5.52	5.87	6.94

a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period.

b. Calculate the standard deviation of the returns for large-company stocks and T-bills over this period.

c. Calculate the observed risk premium in each year for the large-company stocks versus the T-Bills. What was the average risk premium over this period? What was the standard deviation of the risk premium over this period?

d. Is it possible for the risk premium to be negative before an investment is undertaken? Can the risk premium be negative after the fact? Explain.

Input Area:

Year	Large Stocks	T-bills
1970
1971
1972
1973
1974
1975

Output Area:

Large company stocks
Year	Actual Return	Average Return	Deviation	Squared Deviation
1970
1971
1972
1973
1974
1975
Total
Average return
Variance
Standard deviation
T-bill returns
Year	Actual Return	Average Return	Deviation	Squared Deviation
1970
1971
1972
1973
1974
1975
Total
Average return
Variance
Standard deviation
Average observed risk premium
Year	Actual	Average	Deviation	Squared Deviation
1970
1971
1972
1973
1974
1975
Total
Average return
Variance
Standard deviation