Question
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -12 percent, 27 percent, 17 percent, and 16 percent.
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -12 percent, 27 percent, 17 percent, and 16 percent. The average inflation rate over this period was 3.7 percent and the average T-bill rate was 4.4 percent.
What was the average real return on the company's stock?
What was the average nominal risk premium on the company's stock?
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Financial Management Core Concepts
Authors: Raymond M Brooks
3rd edition
133866696, 978-0133866698
