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Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 6 percent, -12 percent, 24 percent, 21 percent, and 16 percent.
Youve observed the following returns on Crash-n-Burn Computers stock over the past five years: 6 percent, -12 percent, 24 percent, 21 percent, and 16 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 4.55 percent.
Requirement 1: What was the average real return on Crash-n-Burns stock?
What was the average nominal risk premium on Crash-n-Burns stock?
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