Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

?Youve observed the following returns on Doyscher Corporations stock over the past five years: 28.5 percent, 16.0 percent, 35.0 percent, 3.5 percent, and 22.5 percent.

?Youve observed the following returns on Doyscher Corporations stock over the past five years: 28.5 percent, 16.0 percent, 35.0 percent, 3.5 percent, and 22.5 percent. The average inflation rate over this period was 3.35 percent and the average T-bill rate over the period was 4.3 percent. Required: (a) What was the average real return on the stock? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Average real return % (b) What was the average nominal risk premium on the stock? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Average nominal risk premium%

image text in transcribed

You've observed the following returns on Doyscher Corporation's stock over the past five years: -28.5 percent, 16.0 percent, 35.0 percent, 3.5 percent, and 22.5 percent. The average inflation rate over this period was 3.35 percent and the average T-bill rate over the period was 4.3 percent. Required (a) What was the average real return on the stock? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Average real return (b) What was the average nominal risk premium on the stock? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).) Average nominal risk premiunm

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance Led Capitalism Shadow Banking Re Regulation And The Future Of Global Markets

Authors: Robert Guttmann

1st Edition

1137398566, 978-1137398567

More Books

Students also viewed these Finance questions