Question
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 20 percent, 12 percent, 17 percent, 20 percent, and 10 percent.
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 20 percent, 12 percent, 17 percent, 20 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 4.6 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 %
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