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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: 3 percent, -13
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: 3 percent, -13 percent, 27 percent, 18 percent, and 18 percent. The average inflation rate over this period was 3.3 percent and the average T-bill rate was 4.9 percent. Requirement 1: What was the average real return on Crash-n-Burn's stock? (Do not round intermediate calculations.) 7.77% Requirement 2: What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round intermediate calculations.) 5.19%
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