1.) Suppose we have the following returns for large-company stocks and Treasury bills over a six yea

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1.) Suppose we have the following returns for large-company stocks and Treasury bills over a six year period:
Year Large Company US Treasury Bill
1 3.66 4.66
2 14.44 2.33
3 19.03 4.12
4 –14.65 5.88
5 –32.14 4.90
6 37.27 6.33







a.) Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the arithmetic average risk premium over this period?
b.) Calculate the observed risk premium in each year for the large-company stocks versus the T-bills. What was the standard deviation of the risk premium over this period?

2.) You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 10 percent, –10 percent, 17 percent, 22 percent, and 10 percent.
a. What was the variance of Yasmin’s returns over this period?


3.) You bought one of Bergen Manufacturing Co.’s 5.2 percent coupon bonds one year ago for $1,055. These bonds make annual payments.......
question also 4,5,6,7............

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