Risk P r emiums. Here are stock market and Treasury bill returns between 1994 and 1998:
Y ear S&P Retu r n T -Bill Retu r n
| 1994 | 1.31 | 3.90 |
| 1995 | 37.43 | 5.60 |
| 1996 | 23.07 | 5.21 |
| 1997 | 33.36 | 5.26 |
| 1998 | 28.58 | 4.86 |
a. What was the risk premium on the S&P 500 in each year?
b. What was the average risk premium?
c. What was the standard deviation of the risk premium?
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