Problem:
Here are stock market and Treasury bill percentage returns between 2006 and 2010:
Year Stock Market Return T-Bill Return
2006 17.27 6.30
2007 7.41 6.06
2008 ?38.83 1.80
2009 29.70 0.90
2010 19.36 0.52
a. What was the risk premium on common stock in each year? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
Year Risk Premium
2006 __________ %
2007 ___________%
2008 ___________ %
2009 ____________%
2010 ____________%
b. What was the average risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Average risk premium = _________ %
c. What was the standard deviation of the risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Standard deviation of the risk premium = ___________ %