The table below shows the average return on U.S. stocks and bonds for 25-year periods ending in 1925, 1950, 1975, and 2000. Calculate the equity risk premium for each quarter century. What lesson...

The table below shows the average return on U.S. stocks and bonds for 25-year periods ending in 1925, 1950, 1975, and 2000. Calculate the equity risk premium for each quarter century. What lesson emerges from your calculations? Ave. Return 1925 1950 1975 2000 Stocks 9.7% 10.2% 11.4% 16.2% Bonds 3.5% 4.1% 2.4% 10.6% Risk Premium Source: Dimson, Elroy, Triumph of the Optimists. © 2002 Elroy Dimson, Paul Marsh, and Mike Staunton. Published by Princeton University Press. Reprinted by permission of Princeton University Press.