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Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 14 percent, 9 percent, 16 percent, 21 percent, and 3 percent.

Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 14 percent, 9 percent, 16 percent, 21 percent, and 3 percent. Suppose the average inflation rate over this period was 3.5 percent and the average T-bill rate over the period was 4.2 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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