Question

Please show your work and don't round til the end.

Suppose we have the following Treasury bill returns and inflation rates over an eight year peniod: Year Treasury Bills Inflation 9 47% 10.35 8.08 7.15 7.66 9.98 12.83 14.63 11 32% 14.93 9.28 6.81 9.04 11.49 15.67 15.53 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g, 32.16.) Treasury bills Inflation 10020% 11 76 % b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g. 32.16.) Treasury bills Inflation 259 @% 334 % c. What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return 1-1364 ,96

Answer 1

average real return = average return on Treasury Bill - average inflation

average real return = 10.02 - 11.76 = -1.74