Consider the following table for an eight-year period:
Year T-bill return Inflation
1 7.30% 8.70%
2 8.09 12.33
3 5.88 6.93
4 5.12 4.87
5 5.46 6.69
6 7.69 9.01
7 10.57 13.28
8 12.15 12.51
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 blank - be certain to enter "0" wherever required. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Year Real return
1 %
2 %
3 %
4 %
5 %
6 %
7 %
8 %
What is the average real return for Treasury bills? (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.)
Average real return for Treasury bills %