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Make answer clear and precise studying for exams!! P12-10 Calculating Real Returns and Risk Premiums (LO1] You've observed the following returns on Crash-n-Burn Computer's stock
Make answer clear and precise studying for exams!!
P12-10 Calculating Real Returns and Risk Premiums (LO1] You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -12 percent, 23 percent, 18 percent, and 14 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 5 percent. What was the average real return on the company's stock? (First find average of the nominal returns and use Fisher's equation to find average real return) What was the average nominal risk premium on the company's stock Step by Step Solution
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