See Attached Assume these were the Inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933:Stock MarketT-BI11YearInflation(%)Return(X)Return(%)6.e1929e.4-16.e1930-4.4-27.23.e1931-9.1-41.91.21932-11.1-8.50.919331.163.6e.3a. 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 ARequired BRequired CRequired DWhat was the real return on the stock market in each year? (Negative answers should be indicated by a minus sign. Do notround intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)YearReal Return%%%19291930193119321933%< Required ARequired B >

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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?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 15DQ

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ssume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Year Inflation(%) Stock Market Return(%) T-Bill Return(%) 1929 0.5 –13.2 6.1 1930 –5.5 –30.7 2.9 1931 –9.3 –47.6 1.5 1932 –13.2 –8.2 0.8 1933 0.9 64.2 0.6 What was the average risk premium?
Assume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Year Inflation(%) Stock Market Return(%) T-Bill Return(%) 1929 0.5 –13.2 6.1 1930 –5.5 –30.7 2.9 1931 –9.3 –47.6 1.5 1932 –13.2 –8.2 0.8 1933 0.9 64.2 0.6 What was the real return on the stock market in each year? What was the average real return? What was the risk premium in each year? What was the average risk premium?
Return to question Item2 Assume these were the inflation rates and U.S. stock market and Treasury bill returns between 1929 and 1933: Year Inflation(%) Stock Market Return(%) T-Bill Return(%) 1929 0.4 –14.6 4.8 1930 –3.9 –27.1 2.9 1931 –8.2 –49.8 1.4 1932 –10.8 –6.4 0.9 1933 1.0 63.8 0.5 What was the real return on the stock market in each year? What was the average real return? What was the risk premium in each year? What was the average risk premium?
Over the past 4 years, large-company stocks and U.S. Treasury bills have produced the returns stated below. During this period, inflation averaged 1.5 percent. Given this information, the average real rate of return on large-company stocks was ___ percent as compared to _____ percent for Treasury bills. Year 1 Year 2 Year 3 Year 4 Return (Large Cap Stocks) 12% 9% 6% 3% Return (U.S. Tsy-bills) 4% 2% 1% 1% Group of answer choices 5.9; -0.5 6.5; -0.5 5.9; 0.5 6.5; 0.5 6.5; 0.0
1, Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47% 8.53% 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 a, Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. b, Calculate the standard deviation of Treasury bill returns and inflation over this time period. c, Calculate the real return for each year. d, What is the average real return for Treasury bills?
Use the data in the tables below to answer the following questions: Average rates of return on Treasury bills, government bonds, and common stocks, 1900–2020. Portfolio Average Annual Rate of Return (%) Average Premium (Extra return versus Treasury bills) (%) Treasury bills 3.7 Treasury bonds 5.4 1.7 Common stocks 11.5 7.8 Standard deviation of returns, 1900–2020. Portfolio Standard Deviation (%) Treasury bills 2.8 Long-term government bonds 8.9 Common stocks 19.5 What was the average rate of return on large U.S. common stocks from 1900 to 2020? What was the average risk premium on large stocks? What was the standard deviation of returns on common stocks? Note: Enter your answer as a percent rounded to 1 decimal place.
The inflation rate in the United States has averaged 3% a year since 1900. Use the data in the table below to answer the following question: Average rates of return on Treasury bills, government bonds, and common stocks, 1900–2020. Portfolio Average Annual Rate of Return (%) Average Premium (Extra return versus Treasury bills) (%) Treasury bills 3.7 Treasury bonds 5.4 1.7 Common stocks 11.5 7.8 What was the average real rate of return on Treasury bills, Treasury bonds, and common stocks in that period? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real return earned on US T-bills. (Enter percentages as decimals and round to 4 decimals)
The following return series comes from Global Financial Data. Year Large Stocks LT Gov Bonds US T-bills CPI (Rf asset) (inflation) 2017 21.83% 6.24% 0.80% 2.07% 2018 -5.28% -1.25% 1.81% 2.10% 2019 25.45% 3.35% 2.15% 1.10% 2020 18.16% 10.25% 4.50% 1.88% 2021 28.70% -1.54% 0.40% 7.00% 2022 -19.78% -8.55% 2.20% 6.50% Calculate the average real risk premium earned on large-company stocks using the approximate Fisher equation. (Enter percentages as decimals and round to 4 decimals)
Which one of the following categories has the widest frequency distribution of returns for the period 1926-2014? Multiple Choice Small-company stocks U.S. Treasury bills Long-term government bonds Inflation Large-company stock
Suppose we have the following returns for large-company stocks and Treasury bills over a six-year period: Year Large-Company stocks US Treasury bills 1 3.95% 6.53% 2 14.13 4.38 3 19.07 4.25 4 −14.61 7.30 5 −32.10 4.94 6 37.32 6.14 a. Calculate the arithmetic average returns for large-company stocks and T-bills over 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 the returns for large-company stocks and T-bills 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-1. 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? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent…
Consider the following table for an eight-year period: Year T-bill return Inflation 1 7.47 % 8.53 % 2 8.94 12.16 3 6.05 6.76 4 5.97 5.04 5 5.63 6.52 6 8.54 8.84 7 10.74 13.11 8 13.00 12.34 Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Average return for Treasury bills % Average annual inflation rate % Calculate the standard deviation of Treasury bill returns and inflation over this time period. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Standard deviation of Treasury bills % Standard deviation of inflation % Calculate the real return for each year. (A negative answer should be indicated by a minus sign. Leave no cells…