Business, 21.04.2020 01:47 arianaguerin

Average Annual Rates Standard Deviation
T-Bills Inflation Real T-Bill T-Bills Inflation Real T-Bill
All months 3.46 2.35 0.56 3.12 4.07 3.81
First half 1.04 1.68 − 0.29 1.29 5.95 6.27
Recent half 4.45 3.53 0.90 3.11 2.89 2.13
(1926-2016) Market Index Big Growth Big Value Small Growth Small Value
Mean excess return (annualized) 0.83 7.98 11.67 8.79 15.56
Standard deviation (annualized) 18.64 18.50 24.62 26.21 28.36
Required:
1. Suppose that the inflation rate is expected to be 2.35% in the near future using the data provided above, what would be your predictions for the following? (Round your answers to 2 decimal places.).
a. The T-bill rate? %
b. The expected rate of return on the Big/Value portfolio? %
c. The risk premium on th stock market?

Answers: 3

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Average Annual Rates Standard Deviation
T-Bills Inflation Real T-Bill T-Bills Inflation Real...

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