The average return on mid-cap equities was 11.9% over the past 50 years. If the average...
The average return on mid-cap equities was 11.9% over the past 50 years. If the average return on Treasury bills was 3.1% over that period, what was the risk premium for mid-cap stocks?
Homework Answers
Risk premium for mid-cap stocks =average return-risk free rate
Risk premium for mid-cap stocks =11.9%-3.1%
Risk premium for mid-cap stocks =8.8%
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The average return on mid-cap equities was 11.9% over the past
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Consider
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Consider
the following rates of return: Year Large-Company Stocks US
Treasury Bills 1 3.99 % 4.59 % 2 14.16 4.94 3 19.25 3.86
4 –14.43 6.99
5 –31.92 5.30 6 37.49 6.20 a. Calculate the arithmetic average
returns for large-company stocks and T-bills over this period b.
Calculate the standard deviation of the returns for large-company
stocks and T-bills over this period. c. Calculate the observed risk
premium in each year for the large-company stocks versus the
T-bills. What was...
Question through 11 Each has 5 points (or course total is 50 points) Over the past 3 years, which of the following investments has provided the smallest average return? Small company stocks B) Common stocks C) Treasury bills D) Treasury bonds E) Corporate bonds A) Over the past 83 years, which of the following investments has been considered the most risky? Small company stocks B) Common stocks C) Treasury bills D) Treasury bonds E) Corporate bonds Carson Inc.'s manager believes...
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