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you've observed the following returns on pine computers stock over the past five years You've observed the following returns on Pine Computer's stock over the
you've observed the following returns on pine computers stock over the past five years
You've observed the following returns on Pine Computer's stock over the past five years: 16 percent, 16 percent, 18 percent, 28 percent, and 10 percent. Suppose the average inflation rate over this period was 2.1 percent and the average T-bill rate over the period was 4.2 percent. a. What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average nominal risk premium on the company's stock? (Do not round intermedlate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Step by Step Solution
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