are stock market and Treasury bill percentage returns between 2006 and 2010:

are stock market and Treasury bill percentage returns between 2006 and 2010:

Year	Stock Market Return	T-Bill Return
2006	17.17	6.00
2007	7.31	5.86
2008	−38.73	1.70
2009	29.40	0.80
2010	19.06	0.42

a.	What was the risk premium on common stock in each year? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)

Year	Risk Premium
2006	%
2007	%
2008	%
2009	%
2010	%

b.	What was the average risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Average risk premium

%

c.	What was the standard deviation of the risk premium? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Standard deviation of the risk premium

%

Explanation:

Some values below may show as rounded for display purposes, though unrounded numbers should be used for the actual calculations.

a. & b.

Year	Stock Market Return	T-Bill Return	Risk Premium	Deviation from Mean	Squared Deviation
2006	17.17	6.00	11.17	7.28	53.06
2007	7.31	5.86	1.45	−2.44	5.93
2008	−38.73	1.70	−40.43	−44.32	1,963.91
2009	29.40	0.80	28.60	24.71	610.78
2010	19.06	0.42	18.64	14.75	217.68
	Total		19.43		2,851.36
	Average		3.89		570.27

c.

The variance (the average squared deviation from the mean) was 570.27.

Therefore: Standard deviation = = 23.88%