Reference no: EM132473944

Suppose we have the following Treasury bill returns and inflation rates over an eight year period:

Year  Treasury Bills  Inflation

18.81%  10.60%

29.66     14.18

37.42     8.59

46.52    6.21

57.00    8.35

69.29    10.77

712.11 14.92

813.85 14.60

Question 1: Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

• Treasury bills % 9.33 Inflation % 11.03

Question 2: Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

• Treasury bills % 2.55 Inflation % 3.26

Question 3: What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)