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You've observed the following returns on Barnett Corporation's stock over the past five years: -27 percent, 15 percent, 33 percent, 3 percent, and 22 percent.
You've observed the following returns on Barnett Corporation's stock over the past five years: -27 percent, 15 percent, 33 percent, 3 percent, and 22 percent. The average inflation rate over this period was 3.30 percent and the average T-bill rate over the period was 4.3 percent.
a. What was the average real return on the stock?
b. What was the average nominal risk premium on the stock?
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