Assume these are the stock market and Treasury bill returns for a 5-year period:Year2013Stock MarketReturn ()31.7T-BillReturn ()0.020.0220142015201610.9-1.613.021.30.020.200.802017Required:a. What was the risk premium on common stock in each year? (Negative values should be entered with a negativesign.)b. What was the average risk premium?c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)Complete this question by entering your answers in the tabs below.Required ARequired BRequired CWhat was the average risk premium? (Do not round intermediate calculations. Enter vour answer as a percent rounded to 2< Prev2 of 5Next >ao search Required ARequired BRequired CWhat was the average risk premium? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2decimal places.)ncesAverage risk premiumRequired ARequired BRequired CWhat was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.) (Do not roundintermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)Standard deviationimgflip.com

Risk Premium for each year = Stock market return of each year - T Bill returns of each year Years…

Assume these are the stock market and Treasury bill returns for a 5-year period: Stock Market Return () 31.7 T-Bill Return () Year 2013 2014 2015 2016 0.02 10.9 -1.6 13.0 21.3 0.02 0.02 0.20 0.80 2017 Required: a. What was the risk premium on common stock in each year? (Negative values should be entered with a negative sign.) b. What was the average risk premium? c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)

Assume these are the stock market and Treasury bill returns for a 5-year period: Stock Market Return () 31.7 T-Bill Return () Year 2013 2014 2015 2016 0.02 10.9 -1.6 13.0 21.3 0.02 0.02 0.20 0.80 2017 Required: a. What was the risk premium on common stock in each year? (Negative values should be entered with a negative sign.) b. What was the average risk premium? c. What was the standard deviation of the risk premium? (Ignore that the estimation is from a sample of data.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 1P

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