Solution-Real return on the stock market in year

Real return on the stock market in year

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Reference no: EM133070411

Assume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933:

Year	Inflation(%)	Stock Market Return(%)	T-Bill Return(%)
1929	0.5	-13.2	6.1
1930	-5.5	-30.7	2.9
1931	-9.3	-47.6	1.5
1932	-13.2	-8.2	0.8
1933	0.9	64.2	0.6

A) What was the real return on the stock market in each year? (Negative answers should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Year Real Return

1929 _________________%

1930 _________________%

1931 _________________%

1932 _________________%

1933 _________________%

B) What was the average real return? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Average Real Return:_________________%

C) What was the risk premium in each year? (Negative answers should be indicated by a minus sign. Enter your answers as a percent rounded to 2 decimal places.)

Year Risk Premium

1929 _________________%

1930 _________________%

1931 _________________%

1932 _________________%

1933 _________________%

D) What was the average risk premium? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Average Risk Premium:_________________%

Reference no: EM133070411

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Real return on the stock market in year

Reference no: EM133070411

Reference no: EM133070411

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