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Assume that last year T bills returned 28 percent while your investment in large company stocks...
Last year, T-bills returned 1 percent while your investment in large-company stocks earned an average of 11 percent. Which one of the following terms refers to the difference between these two rates of return? A. risk premium B. geometric return C. arithmetic D. standard deviation E. variance
Consider the following table for a period of six years: Returns Year Large-Company Stocks U.S. Treasury Bills 1 –15.59 % 7.47 % 2 –26.74 8.08 3 37.41 6.05 4 24.11 5.97 5 –7.52 5.54 6 6.75 7.91 Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average returns Large-company stock % T-bills % Calculate...
Consider
the following rates of return: Year Large-Company Stocks US
Treasury Bills 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 a. Calculate the arithmetic average
returns for large-company stocks and T-bills over this period b.
Calculate the standard deviation of the returns for large-company
stocks and T-bills over this period. c. Calculate the observed risk
premium in each year for the large-company stocks versus the
T-bills. What was...
The following are annual rates of return for U.S. government T-bills and U.K. common stocks. Year U.S Government T-Bills U.K Government Common Stock Year US Govt T-bills UK Common Stock 2012 0.063 0.150 2013 0.081 0.043 2014 0.076 0.374 2015 0.090 0.192 2016 0.085 0.106 a. Compute the arithmetic mean rate of return and standard deviation of rates of return for the two series. b. Discuss these two alternative investments in terms of their arithmetic average rates of return and...
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year 1 2 3 Large Company US Treasury Bill 4.00% 4.62% 14.49 4.96 19.33 3.88 -14.35 7.00 -31.84 5.38 37.04 6.43 5 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round Intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of the returns for...
Suppose we have the following returns for large-company stocks and Treasury bills over a six year period: Year Large Company US Treasury Bill 6.59 3.97 1 2 14.34 4.42 19.23 4.29 7.32 4 -14.45 -31.94 5.28 5.38 6 37.47 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average returns Large company stocks T-bills b. Calculate the...
Consider the following table for a period of six years: Year Returns Large- U.S. Company Stocks Treasury Bills - 16.39% 7.63% -26.98 8.16 37.57 6.21 24.27 6.77 - 7.84 5.62 6.91 8.15 Un a-1. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. Calculate the standard deviation of the returns for large-company stocks and T-bills...
Consider the following rates of return: US Large- Year Company Stocks 1 3.66 % 14.44 3 19.03 -14.65 -32.14 6 37.27 Treasury Bills 4.66 % 2.33 4.12 5.88 4.90 6.33 5 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average returns Large-company stocks T-bills b. Calculate the standard deviation of the returns for large-company stocks...
value 1.66 points Problem 10-8 Risk Premiums Consider the following rates of return US Large- Year Company Stocks 370 2 14.36 3 19.35 4 -14.33 5 -31.82 6 37 06 Treasury Bus 4.78 % 3.61 4.20 5.92 5.40 5.41 a. Calculate the arithmetic average returns for large-company stocks and T-bills over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average returns Large-company stocks T-bills b. Calculate the...
Consider the following table for a period of six years: Year Returns Large- U.S. Company Treasury Bills Stocks - 15.59% 7.47% -26.74 8.08 37.41 6.05 24.11 5.97 - 7.52 5.54 6.75 7.91 ou WN- a-1. Calculate the arithmetic average returns for large-company stocks and T-bills over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. Calculate the standard deviation of the returns for large-company stocks and...