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Suppose we have the following returns for large-company stocks and Treasury bills over a six year period:

Year Large Company US Treasury Bill

1 3.92 5.90

2 14.18 2.53

3 19.37 3.76

4 -14.31 7.16

5 -31.80 5.42

6 37.08 6.24

Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the average risk premium over this period, in %? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92320679

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