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Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 10 percent, 11 percent, 18 percent, 19 percent, and 10 percent.

Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 10 percent, 11 percent, 18 percent, 19 percent, and 10 percent. Suppose the average inflation rate over this period was 2.2 percent and the average T-bill rate over the period was 4.7 percent.

a.

What was the average real risk-free rate over this time period?

b. What was the average real risk premium?

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