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Here are stock market and Treasury bill returns between 1997 and 2001:

Year Stock Market Return T-Bill Return

1997 31.29 5.26

1998 23.43 4.86

1999 23.56 4.68

2000 -10.89 5.89

2001 -10.97 3.83

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

b. What was the average risk premium?

c. What was the standard deviation of the risk premium?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9396062

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