Suppose we have the following Treasury bill returns and inflation rates over an eight- year period: Year Treasury bills Inflation 12345698 9.01% 10.86% 9.87 14.41 7.62 8.80 4 6.71 6.39 5 7.20 8.56 6 9.50 10.99 7 12.33 15.15 8 14.09 14.89 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What was the average real return for Treasury bills over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Suppose we have the following Treasury bill returns and inflation rates over an eight- year period: Year Treasury bills Inflation 12345698 9.01% 10.86% 9.87 14.41 7.62 8.80 4 6.71 6.39 5 7.20 8.56 6 9.50 10.99 7 12.33 15.15 8 14.09 14.89 a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) c. What was the average real return for Treasury bills over this period? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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:Suppose we have the following Treasury bill returns and inflation rates over an eight-
year period:
Year
Treasury
bills
Inflation
12345698
9.01%
10.86%
9.87
14.41
7.62
8.80
4
6.71
6.39
5
7.20
8.56
6
9.50
10.99
7
12.33
15.15
8
14.09
14.89
a. Calculate the average return for Treasury bills and the average annual inflation rate for
this period. (Do not round intermediate calculations and enter your answers as a
percent rounded to 2 decimal places, e.g., 32.16.)
b. Calculate the standard deviation of Treasury bill returns and inflation over this period.
(Do not round intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
c. What was the average real return for Treasury bills over this period? (A negative
answer should be indicated by a minus sign. Do not round intermediate
calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
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