Problem 11-6 Risk Premiums (LO1) Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (8) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Check my work Required: 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? (Ignore that the estimation is from a sample of data.) Complete this question by entering your answers in the tabs below. Required A Required B Required C What was the risk premium on common stock in each year? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative values should be entered with a negative sign. Year Risk Premium 2016 % 2017 % 2018 % 2019 % 2020 %
Problem 11-6 Risk Premiums (LO1) Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market Return (8) T-Bill Return (%) 2016 13.0 0.2 2017 21.0 0.8 2018 -6.2 1.8 2019 29.8 2.1 2020 20.6 0.4 Check my work Required: 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? (Ignore that the estimation is from a sample of data.) Complete this question by entering your answers in the tabs below. Required A Required B Required C What was the risk premium on common stock in each year? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative values should be entered with a negative sign. Year Risk Premium 2016 % 2017 % 2018 % 2019 % 2020 %
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:Problem 11-6 Risk Premiums (LO1)
Assume these are the stock market and Treasury bill returns for a 5-year period:
Year
Stock Market Return
(8)
T-Bill Return (%)
2016
13.0
0.2
2017
21.0
0.8
2018
-6.2
1.8
2019
29.8
2.1
2020
20.6
0.4
Check my work
Required:
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? (Ignore that the estimation is from a sample of data.)
Complete this question by entering your answers in the tabs below.
Required A Required B Required C
What was the risk premium on common stock in each year?
Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative
values should be entered with a negative sign.
Year
Risk Premium
2016
%
2017
%
2018
%
2019
%
2020
%
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