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Youve observed the following returns on Pine Computers stock over the past five years: 15 percent, 15 percent, 17 percent, 27 percent, and 10 percent.
Youve observed the following returns on Pine Computers stock over the past five years: 15 percent, 15 percent, 17 percent, 27 percent, and 10 percent. Suppose the average inflation rate over this period was 1.6 percent and the average T-bill rate over the period was 4.1 percent. a. What was the average real return on the companys 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 companys stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
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