Calculation of ARR for Treasury bills.
Refer to the following table:
|
Year
|
T-bill return
|
Inflation
|
|
1976
|
0.0507
|
0.0486
|
|
1977
|
0.0545
|
0.0670
|
|
1978
|
0.0764
|
0.0902
|
|
1979
|
0.1056
|
0.1329
|
|
1980
|
0.1210
|
0.1252
|
|
1981
|
0.1460
|
0.0892
|
|
1982
|
0.1094
|
0.0383
|
|
1983
|
0.0899
|
0.0379
|
Requirement 1:
Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Do not include the percent sign (%). Round your answers to 2 decimal places, e.g. 32.16.)
Average Treasury bills return _____ percent
Average inflation _____ percent
Requirement 2:
Calculate the standard deviation of Treasury bills returns and over this period. (Do not include the percent sign (%). Round your answers to 2 decimal places, e.g. 32.16.)
Standard deviation
T-bills _____ percent
Inflation _____ percent
Requirement 3:
Calculate the average real return for Treasury bills over this period. (Negative amount should be indicated by a minus sign. Do not include the percent sign (%). Round your answers to 2 decimal places, e.g. 32.16.)
Average real return _____ percent