Use the data in the tables below to answer the following questions: Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2017. Portfolio Treasury bills Treasury bonds Common stocks Average Annual Rate of Return (%) 3.8 5.3 11.5 Average Premium (Extra return versus Treasury bills) (%) 1.5 7.7 Standard deviation of returns, 1900-2017. Standard Portfolio Deviation (%) Treasury bills 2.9 Long-term government bonds 9.0 Common stocks 19.7 a. What was the average rate of return on large U.S. common stocks from 1900 to 2017? b. What was the average risk premium on large stocks? c. What was the standard deviation of returns on common stocks? (Enter your answer as a percent rounded to 1 decimal place.) a. Average rate of return % b. Average risk premium % C. Standard deviation of returns %
Use the data in the tables below to answer the following questions: Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2017. Portfolio Treasury bills Treasury bonds Common stocks Average Annual Rate of Return (%) 3.8 5.3 11.5 Average Premium (Extra return versus Treasury bills) (%) 1.5 7.7 Standard deviation of returns, 1900-2017. Standard Portfolio Deviation (%) Treasury bills 2.9 Long-term government bonds 9.0 Common stocks 19.7 a. What was the average rate of return on large U.S. common stocks from 1900 to 2017? b. What was the average risk premium on large stocks? c. What was the standard deviation of returns on common stocks? (Enter your answer as a percent rounded to 1 decimal place.) a. Average rate of return % b. Average risk premium % C. Standard deviation of returns %
Chapter7: Types And Costs Of Financial Capital
Section: Chapter Questions
Problem 15DQ
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Bhupatbhai
Transcribed Image Text:Use the data in the tables below to answer the following questions:
Average rates of return on Treasury bills, government bonds, and common stocks, 1900-2017.
Portfolio
Treasury bills
Treasury bonds
Common stocks
Average Annual
Rate of Return (%)
3.8
5.3
11.5
Average Premium
(Extra return
versus Treasury
bills) (%)
1.5
7.7
Standard deviation of returns, 1900-2017.
Standard
Portfolio
Deviation (%)
Treasury bills
2.9
Long-term government bonds
9.0
Common stocks
19.7
a. What was the average rate of return on large U.S. common stocks from 1900 to 2017?
b. What was the average risk premium on large stocks?
c. What was the standard deviation of returns on common stocks?
(Enter your answer as a percent rounded to 1 decimal place.)
a.
Average rate of return
%
b.
Average risk premium
%
C.
Standard deviation of returns
%
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