Question
Youve observed the following returns on SkyNet Data Corporations stock over the past five years: 12 percent, 12 percent, 19 percent, 24 percent, and 10
Youve observed the following returns on SkyNet Data Corporations stock over the past five years: 12 percent, 12 percent, 19 percent, 24 percent, and 10 percent. Suppose the average inflation rate over this period was 2.5 percent, and the average T-bill rate over the period was 3.2 percent. a. What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent 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 and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Average nominal risk premium ____________%
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