1.

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 6 percent, -14 percent, 12percent, 9 percent, and 11 percent. Suppose the average inflation rate over this time period was 2.8 percent and the average T-bill rate was 3.2 percent. Based on this information, what was the average nominal risk premium?

2.00 percent

1.60 percent

2.01 percent

-1.2 percent

-1.29 percent

2.

Suppose a stock had an initial price of $76 per share, paid a dividend of $1.7 per share during the year, and had an ending share price of $91. Compute the percentage total return.

rev: 09_20_2012

21.97

18.35

27.63

23.07