The table below shows the difference in returns between stocks and Treasury bills and the difference between stocks and Treasury bonds at ten year intervals. Years Stocks vs. Bonds Stocks vs. Bills...

The table below shows the difference in returns between stocks and Treasury bills and the difference between stocks and Treasury bonds at ten year intervals. Years Stocks vs. Bonds Stocks vs. Bills 196473 3.7% 8.3% 197483 0.2% 8.6% 198493 7.5% 5.4% 19942003 4.8% 2.1% a. At the end of 1973, the yield on Treasury bonds was 6.6% and the yield on T-bills was 7.2%. Using these fi gures and the historical data above from 19641973, construct two estimates of the expected return on equities as of December 1973. b. At the end of 1983, the yield on Treasury bonds was 6.6% and the yield on T-bills was 7.2%. Using these fi gures and the historical data above from 19741983, construct two estimates of the expected return on equities as of December 1983. c. At the end of 1993, the yield on Treasury bonds was 6.6% and the yield on T-bills was 2.8%. Using these fi gures and the historical data above from 19841993, construct two estimates of the expected return on equities as of December 1993. d. At the end of 2003, the yield on Treasury bonds was 5.0% and the yield on T-bills was 1.0%. Using these fi gures and the historical data above from 19942003, construct two estimates of the expected return on equities as of December 2003. e. What lessons do you learn from this exercise? How much do your estimates of the expected return on equities vary over time, and why do they vary?