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Table 12.1 Year Large Company Stock Long-Term Government Bonds US Treasury Bills Consumer Price Index 1973 -14.69 3.30 7.29 8.71 1974 -26.47 4.00 7.99 12.34 1975 37.23 5.52 5.87 6.94 1976 23.93 15.56 5.07 4.86 1977 -7.16 0.38 5.45 6.70 1978 6.57 -1.26 7.64 9.02 1979 18.61 -2.76 10.56 13.29 1980 32.50 -2.48 12.10 12.52 Refer to Table 12.1 and look...

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Question

Finance

Table 12.1

Year

Large Company Stock

Long-Term Government Bonds

US Treasury Bills

Consumer Price Index

1973

-14.69

3.30

7.29

8.71

1974

-26.47

4.00

7.99

12.34

1975

37.23

5.52

5.87

6.94

1976

23.93

15.56

5.07

4.86

1977

-7.16

0.38

5.45

6.70

1978

6.57

-1.26

7.64

9.02

1979

18.61

-2.76

10.56

13.29

1980

32.50

-2.48

12.10

12.52

Refer to Table 12.1 and look at the period from 1973 through1980.

  1. Calculate the average return for Treasury bills and the averageannual inflation rate for this period. (Do not round intermediatecalculations and enter your answers as a percent rounded to 2decimal places, e.g., 32.16.)

b.           Calculate the standard deviation of Treasury bill returns andinflation over this period. (Do not round intermediate calculationsand 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 thisperiod? (A negative answer should be indicated by a minus sign. Donot round intermediate calculations and enter your answer as apercent rounded to 2 decimal places, e.g., 32.16.)

a

Treasury Bills

%

Inflation

%

b

Treasury Bills

%

Inflation

%

c

Average real return

%

Answer & Explanation Solved by verified expert
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