Problem BPart 1. Recalling the definitions of risk premiums from Chapter 8 and using the Treasury bill return in Table 12.4 as an approximation to the nominal risk-free rate, what is the risk premium from investing in each of the other asset classes listed in Table 12.4?Part 2. What is the real, or after-inflation, return from each of the asset classes listed in Table 12.4?TABLE 12.4Historical Returns and Standard Deviation of Returns from Different Assets, 1928-2008 Treasury BondsStocksInflation Rate11.1%3.2%20.4%4.0%
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