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Risk premium on common stock

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Reference no: EM133002802

Assume these are the stock market and Treasury bill returns for a 5-year period:

Year Stock Market Return (%) T-Bill Return (%)

2013 33.30 0.12

2014 13.20 0.12

2015 -3.50 0.12

2016 14.50 0.07

2017 23.80 0.09

Required:

a. What was the risk premium on common stock in each year?

b. What was the average risk premium?

c. What was the standard deviation of the risk premium?

Reference no: EM133002802

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