Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help! answer both questions please Problem 12-10 Calculating Real Returns and Risk Premiums [LO1] You've observed the following returns on Crash-n-Burn Computer's stock over
please help! answer both questions please
Problem 12-10 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: 15 percent, 6 percent, 18 percent, 14 percent, and 10 percent. Suppose the average inflation rate over this period was 1.7 percent and the average T-bill rate over the period was 5.2 percent. a. What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average nominal risk premium on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started