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Suppose we have the following Treasury bill returns and inflation rates over an eight year period: Year Treasury Bills Inflation 1 8.81 10.60 2 9.66 14.18 3 7.42 8.59 4 6.52 6.21 5 7.00 8.35 6 9.29 10.77 7 12.11 14.92 8 13.85 14.60 a. Calculate the average return for Treasury bills and the average annual inflation rate (consumer price index) for this period. (Round your answers to 2 decimal places. (e.g., 32.16)) Treasury bills % Inflation % b. Calculate the standard deviation of Treasury bill returns and inflation over this period. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Treasury bills % Inflation % c. What was the average real return for Treasury bills over this period? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16) ) Average real return % Jan 22 2014 12:26 PM

 

Solution ID:609193 | This paper was updated on 26-Nov-2015

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