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What was the risk premium on common stock

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Reference no: EM132491150

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

Year Stock

Market Return (%) T-Bill Return (%)
2013 32.10 0.05

2014 11.30 0.05

2015 -2.00 0.05

2016 13.40 0.23

2017 21.70 0.25

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: EM132491150

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