Calculating Real Returns and Risk Premiums In Problem 11.8, suppose the average inflation rate over this period

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Calculating Real Returns and Risk Premiums In Problem 11.8, suppose the average inflation rate over this period was 4.2 per cent and the average T-bill rate over the period was 5.1 per cent.

(a) What was the average real return on British Auto’s shares?

(b) What was the average nominal risk premium on British Auto’s shares?

(c) What was the average real risk-free rate over this time period?

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Fundamentals Of Corporate Finance

ISBN: 9780077178239

3rd Edition

Authors: David Hillier, Iain Clacher, Stephen A. Ross

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