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What was the standard deviation of the risk premium

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Reference no: EM132604061

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

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

2013                     36.00                                             0.22

2014                    15.40                                               0.22

2015                    -5.20                                                0.22

2016                     17.00                                              0.09

2017                     26.00                                              0.11

Required:

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

Question b. What was the average risk premium?

Question c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)

 

Reference no: EM132604061

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