Homework answers / question archive / Assume these are the stock market and Treasury bill returns for a 5-year period:  Year                  Stock Market Return (%)            T-Bill Return (%) 2013                               32

Assume these are the stock market and Treasury bill returns for a 5-year period:  Year                  Stock Market Return (%)            T-Bill Return (%) 2013                               32

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Assume these are the stock market and Treasury bill returns for a 5-year period: 

Year                  Stock Market Return (%)            T-Bill Return (%)

2013                               32.10                                  0.05

2014                               11.30                                  0.05

2015                              -2.00                                    0.05

2016                              13.40                                   0.23

2017                               21.70                                  0.25 
Required:

a) What was the risk premium on common stock in each year?

b) What was the average risk premium?

c) What was the standard deviation of the risk premium?