Suppose we have the following Treasury bill returns and inflation rates over an eight year period: Treasury Bills 10.45% Year 11.36 9.06 8.34 8.88 11.23 14.11 15.97 Inflation 12.55% 16.00 10.29 7.97 10.29 12.77 16.98 16.90 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 11.18 % 12.97 % Treasury bills Inflation b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Treasury bills .50 % Inflation % c. What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return % -N34 5678
Suppose we have the following Treasury bill returns and inflation rates over an eight year period: Treasury Bills 10.45% Year 11.36 9.06 8.34 8.88 11.23 14.11 15.97 Inflation 12.55% 16.00 10.29 7.97 10.29 12.77 16.98 16.90 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 11.18 % 12.97 % Treasury bills Inflation b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Treasury bills .50 % Inflation % c. What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return % -N34 5678
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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What would the b and c portions. I especially don't understand what the average real return is. For a I got 11.18 for the treasury and 12.97 for the inflation by taking the averages.
Transcribed Image Text:Suppose we have the following Treasury bill returns and inflation rates over an eight year period:
Year
1
2
3
4.
Treasury Bills
10.45%
11.36
9.06
8.34
8.88
11.23
14.11
15.97
Inflation
12.55%
16.00
10.29
7.97
10.29
12.77
16.98
16.90
7
8.
a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do
not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal
places, e.g., 32.16.)
Treasury bills
11.18 %
Inflation
12.97 %
b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round
intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g.,
32.16.)
Treasury bills
.50 %
Inflation
%
c. What was the average real return for Treasury bills over this period? (Negative amount should be
indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a
percent rounded to 2 decimal places, e.g., 32.16.)
Average real return
%
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