1.You are given the following long-run annual rates of return for alternative investment instruments:
• US Government T-Bills 3.5%
• Large-cap common stocks 12.1%
• Long-term corporate bonds 6.2%
• Long-term government bonds 5.6%
• Small-capitalization common stock 14.6%
The annual rate of inflation during the period was 2.9%. Compute the real rate of return on these investment alternatives.