Assume these were the Inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Stock Market Return(X) -16.0 T-Bill ITTI Year Inflation(%) Return(X) 6.e 1929 0.4 1930 -4.4 -27.2 3.e 1.2 1931 -9.1 -41.9 1932 -11.1 -8.5 e.9 1933 1.1 63.6 e.3 a. What was the real return on the stock market In each year? b. What was the average real return? c. What was the risk premlum In each year? d. What was the average risk premlum?
Assume these were the Inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Stock Market Return(X) -16.0 T-Bill ITTI Year Inflation(%) Return(X) 6.e 1929 0.4 1930 -4.4 -27.2 3.e 1.2 1931 -9.1 -41.9 1932 -11.1 -8.5 e.9 1933 1.1 63.6 e.3 a. What was the real return on the stock market In each year? b. What was the average real return? c. What was the risk premlum In each year? d. What was the average risk premlum?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Assume these were the Inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933:
Stock Market
T-BI11
Year
Inflation(%)
Return(X)
Return(%)
6.e
1929
e.4
-16.e
1930
-4.4
-27.2
3.e
1931
-9.1
-41.9
1.2
1932
-11.1
-8.5
0.9
1933
1.1
63.6
e.3
a. What was the real return on the stock market in each year?
b. What was the average real return?
c. What was the risk premlum in each year?
d. What was the average risk premlum?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
Required D
What was the real return on the stock market in each year? (Negative answers should be indicated by a minus sign. Do not
round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
Year
Real Return
%
%
%
1929
1930
1931
1932
1933
%
< Required A
Required B >
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