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Here are stock market and Treasury bill percentage returns between 2006 and 2010:

Year Stock Market Return T-Bill Return
2006 17.27 6.30
2007 7.41 6.06
2008 ?38.83 1.80
2009 29.70 0.90
2010 19.36 0.52

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a. What was the risk premium on common stock in each year? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

Year Risk Premium
2006 __________ %
2007 ___________%
2008 ___________ %
2009 ____________%
2010 ____________%

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b. What was the average risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Average risk premium = _________ %

c. What was the standard deviation of the risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Standard deviation of the risk premium = ___________ %

Basic Finance, Finance

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