Question
Youve observed the following returns on Barnett Corporations stock over the past five years: 24.9 percent, 13.6 percent, 30.2 percent, 2.3 percent, and 21.3 percent.
Youve observed the following returns on Barnett Corporations stock over the past five years: 24.9 percent, 13.6 percent, 30.2 percent, 2.3 percent, and 21.3 percent. The average inflation rate over this period was 3.23 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return % b. What was the average nominal risk premium on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average nominal risk premium %
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