The following return series comes from Global Financial Data.
$\begin{array}{ccccc} Year & Large Stocks LT Gov Bonds & \begin{matrix} US T-bills \\ (Rf asset) \end{matrix} & \begin{matrix} CPI \\ (inflation) \end{matrix} \\ 2018 & - 5.28 % & - 1.25 % & 0.80 % & 2.10 % \\ 2019 & 25.45 % & 3.35 % & 1.20 % & 1.10 % \\ 2020 & 18.16 % & 10.25 % & 0.75 % & 1.88 % \\ 2021 & 28.70 % & - 1.54 % & 0.81 % & 7.00 % \\ 2022 & - 19.78 % & - 8.55 % & 2.20 % & 6.50 % \end{array}$
Calculate the average nominal return earned on large-company stocks. (Enter percentages as decimals and round to 4 decimals)

Answer

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Answer

The average nominal return earned on large-company stocks is $9.45 %$ .

Steps

Step 1 ：Given the return series for large-company stocks over 5 years as follows: -5.28%, 25.45%, 18.16%, 28.7%, -19.78%.

Step 2 ：Calculate the sum of these returns.

Step 3 ：Divide the sum by the total number of years (5) to get the average return.

Step 4 ：The average nominal return earned on large-company stocks is $9.45 %$ .