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1 ABC Corp's stock over the last 5 years averaged a return of 12.5% If the average inflation rate is 8.1% and average T-Bill rate
1 | ABC Corp's stock over the last 5 years averaged a return of 12.5% | |||
If the average inflation rate is 8.1% and average T-Bill rate was 4.1% during this period | ||||
1.1 | What is the average real return on ABC's stock | |||
1.2 | What was the average nominal risk premium on the stock? | |||
1.3 | YYZ Stock has an expected return of 10.2% and a beta of 0.91 and the expected return on the market is 10.8% | |||
1.4 | What must the risk free rate be? | |||
1.5 | Based on the data in the table below, calculate the following: | |||
Year | Stocks | T-bills | ||
2007 | 8.10% | 7.92% | ||
2008 | -36.47% | 7.99% | ||
2009 | 37.23% | 5.87% | ||
2010 | 23.93% | 5.17% | ||
2011 | -17.16% | 5.45% | ||
2012 | 6.57% | 7.64% | ||
1.6 | Arithmetic average returns for the stocks over the period | |||
1.7 | Arithmetic average returns for the T-Bills over the period | |||
1.8 | Standard Deviation of the returns for Stocks over the period | |||
1.9 | Standard Deviation of the returns for T-Bills over the period |
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