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# Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (%)T-Bill Return (%) 2011 0.03 2012 16.05...

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

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

2011   0.98   0.03

2012    16.06   0.05

2013    33.06   0.07

2014   12.71   0.05

2015   0.67   0.21

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

2011 ____ %

2012 ___ %

2013 ___%

2014 ____%

2015 ____ %

2011 = 0.95% 2012: =... View the full answer

• c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)
• acv1214
• May 03, 2018 at 10:42pm
• standard deviation of risk premium = 13.3275% (Use excel formula stdev(.95,16.01,32.99,12.66,0.46)
• May 03, 2018 at 10:44pm
• the answer is not correct....
• acv1214
• May 04, 2018 at 11:29am
• which one ? are you referring to standard deviation ? worth rounding off to 2 decimal places - 13.33%
• May 04, 2018 at 11:39am
• yes the standard dev I rounded it off to 13.33 but its saying its incorrect...
• acv1214
• May 04, 2018 at 11:44am
• that is strange because the risk premiums are correct - so standard deviation is fairly straight forward - The last try would be 0.13 (if it requires the standard deviation in decimal form and not percentage form)
• May 04, 2018 at 11:47am

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