Question
Youve observed the following returns on SkyNet Data Corporations stock over the past five years: 11 percent, 10 percent, 19 percent, 18 percent, and 10
Youve observed the following returns on SkyNet Data Corporations stock over the past five years: 11 percent, 10 percent, 19 percent, 18 percent, and 10 percent. Suppose the average inflation rate over this period was 2.7 percent, and the average T-bill rate over the period was 4.8 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 1decimal place, e.g., 32.1.) |
Average nominal risk premium | % |
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