Suppose we have the following Treasury bill returns and inflation rates over an eight year period:
| Year |
Treasury Bills |
Inflation |
| 1 |
8.62% |
10.40% |
| 2 |
9.46 |
13.96 |
| 3 |
7.23 |
8.39 |
| 4 |
6.34 |
6.04 |
| 5 |
6.81 |
8.15 |
| 6 |
9.09 |
10.56 |
| 7 |
11.90 |
14.70 |
| 8 |
13.62 |
14.33 |
a. Calculate the average return for Treasury bills and the average annual inflation rate for this period. (Do not round intermediate calculations. Enter your answers as a percent rounded 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. Enter your answers as a percent rounded 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. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Average real return %