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7 You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 16 percent, 16 percent, 18 percent, 28 percent, and

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7 You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 16 percent, 16 percent, 18 percent, 28 percent, and 10 percent. Suppose the average inflation rate over this period was 2.1 percent and the average T-bill rate over the period was 4.2 percent. 10 points a. What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average nominal risk premium on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Answer is complete but not entirely correct. a. 9.00 % Average real return Average nominal risk b. 7.0 %

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