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Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 11 percent, 10 percent, 19 percent, 18 percent, and 10 percent.
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 11 percent, 10 percent, 19 percent, 18 percent, and 10 percent. Suppose the average inflation rate over this period was 2.7 percent and the average T-bill rate over the period was 4.8 percent. |
a. | What was the average real return on Crash-n-Burns stock? (Round your answer to 2 decimal places. (e.g., 32.16)) |
Average real return | % |
b. | What was the average nominal risk premium on Crash-n-Burns stock? (Round your answer to 1 decimal place. (e.g., 32.1)) |
Average nominal risk | % |
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