Question
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 14 percent, 7 percent, 17 percent, 15 percent, and 10 percent.
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 14 percent, 7 percent, 17 percent, 15 percent, and 10 percent. Suppose the average inflation rate over this period was 1.4 percent and the average T-bill rate over the period was 5.1 percent.
A. What was the average real return on Crash-n-Burns stock? (Do not round intermediate calculations. 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 Crash-n-Burns stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
Average nominal risk premium %???
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