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P12-10 Calculating Real Returns and Risk Premiums (LO1] You've observed the following nominal returns on Crash-n-Burn Computer's stock over the past five years: 4 percent,
P12-10 Calculating Real Returns and Risk Premiums (LO1] You've observed the following "nominal" returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -14 percent, 24 percent, 16 percent, and 13 percent. The average inflation rate over this period was 4 percent and the average T-bill rate was 5.25 percent. Requirement 1: What was the average "real" return on Crash-n-Burn's stock? Note: Use the Fisher Effect Formula from the Bond chapter to convert nominal to real rates of return. (Do not round intermediate calculations.) (Click to select) Requirement 2: What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round intermediate calculations.) (Click to select) V
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