8% Problem #1 (7 Marks) Consider the following historical returns on ROM shares. Assume the average risk-free rate during the 2014-2018 period was equal to 1.5%. Year ROM Return 2018 6% 2017 2016 10% 2015 25% 2014 -8% a) Calculate the arithmetic average return and the risk premium for ROM. (2 marks) b) Calculate the geometric average return for ROM. (2 marks) c) Calculate the standard deviation for ROM using the arithmetic average return