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1 . You ve observed the following returns on Pine Computer s stock over the past five years: 2 4 . 3 percent, 1 3

1. Youve observed the following returns on Pine Computers stock over the past five years: 24.3 percent, 13.2 percent, 29.4 percent, 2.1 percent, and 21.1 percent. The average inflation rate over this period was 3.21 percent and the average T-bill rate over the period was 4.3 percent.
a. What was the average real return on the stock?
b. What was the average nominal risk premium on the stock?

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