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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: 5 percent, -
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: 5 percent, - 8 percent, 27 percent, 15 percent, and 18 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was 3.8 percent. Requirement 1: What was the average real return on Crash-n-Burn's stock? (Do not round intermediate calculations.) Requirement 2: What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round intermediate calculations.)
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