The following table shows the nominal returns on Costaguanan stocks and the rate of inflation.
Year Nominal Return (%) Inflation (%)
2004 +12.0 +2.4
2005 +7.8 +3.2
2006 +17.2 +4.0
2007 +7.7 +4.3
2008 –43.5 +0.2
a. What was the standard deviation of the market returns? (Note: Use the method for calculating variance and standard deviation described in Section 7-2 of the text.) (Do not round intermediate calculations. Round your answer to 1 decimal place.)
Standard deviation %=
b. Calculate the average real return. (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 1 decimal place.)
Average real return %=