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
Chapter8: Relationships Among Inflation, Interest Rates, And Exchange Rates
Section: Chapter Questions
Problem 2IEE
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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.
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