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You've observed the following returns on Pine Computer's stock over the past 5 years; 8 percent, -12 percent, 14 percent, 21 percent, and 16 percent.
You've observed the following returns on Pine Computer's stock over the past 5 years; 8 percent, -12 percent, 14 percent, 21 percent, and 16 percent. Suppose the average inflation rate over this period was 3.1 percent and the average T-bill rate over the period was 3.9 percent.
a. What was the average real return on the company's stock?
b. What was the average nominal risk premium on the company's stock?
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