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A) Calculate the nominal and real returns as well as the nominal and real risk premiums for the following corporate bond investment: Purchased for $940
A) Calculate the nominal and real returns as well as the nominal and real risk premiums for the following corporate bond investment: Purchased for $940 one year ago, 4% coupon rate, sold for $994. The inflation rate was 5.0% and T-bills returned 6%. Show your work.
B) Calculate the expected return, variance, and standard deviation for a portfolio of four equally-weighted stocks with returns of 26.4%, -9.2%, 2.9%, and 22.0%. (Show your work)
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