Question
Youve observed the following returns on Barnett Corporations stock over the past five years: 24.3 percent, 13.2 percent, 29.4 percent, 2.1 percent, and 21.1 percent.
Youve observed the following returns on Barnett Corporations stock over the past five years: 24.3 percent, 13.2 percent, 29.4 percent, 2.1 percent, and 21.1 percent. The average inflation rate over this period was 3.21 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 4.93 %
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 %
NOTE: the answer for part a) is correct. Just can't figure out part b.
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