What was the average risk premium over the period

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Reference no: EM13328054

Suppose we have the following returns for large-company stocks and Treasury bills over a six year period:

Year	Large Company	US Treasury Bill
1	3.99	4.59
2	14.16	4.94
3	19.25	3.86
4	-14.43	6.99
5	-31.92	5.30
6	37.49	6.20

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

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?

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

Reference no: EM13328054

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