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Refer to following table that occurred during the period of 2009 to 2014:
| Year | Statistics Canada Inflation | Canadian stocks S&P/TSX Composite | FTSE TMX Canada 91-day T-bill | FTSE TMX Long Canada long-term bond | US stocks S&P 500 (Cdn. $) | Nesbitt Burns small stocks | S&P/TSX Venture Composite |
| 2009 | 1.30 | 34.35 | 0.60 | 5.31 | 9.26 | 86.80 | 90.80 |
| 2010 | 2.40 | 17.27 | 0.50 | 12.10 | 8.10 | 36.10 | 50.45 |
| 2011 | 2.30 | - 8.57 | 1.00 | 17.72 | 4.39 | - 19.50 | - 35.07 |
| 2012 | 1.50 | 5.41 | 1.00 | 5.20 | 10.98 | - 1.19 | - 16.88 |
| 2013 | 0.90 | 9.55 | 1.00 | - 6.20 | 38.45 | 4.48 | - 21.80 |
| 2014 | 2.00 | 7.42 | 0.90 | 17.50 | 21.74 | - 2.67 | - 25.00 |
a) Calculate the average return for Treasury Bills and the average annual inflation rate (consumer price index) for this period.
b) Calculate the standard deviation of Treasury Bill returns and inflation over this period.
c) Calculate the real return for each year (remember to use the Fisher equation). What is the average real return for Treasury Bills?
d) Many people consider Treasury Bills to be risk-free. What do these calculations tell you about a potential risk of investing in Treasury Bills?
*Please show your work/provide the complete solution to your answer*
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