Problem:
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 19 percent, -13 percent, 16 percent, 21 percent, and 10 percent. Suppose the average inflation rate over this period was 1.4 percent and the average T-bill rate over the period was 4.5 percent
Required:
Question: What was the average real risk premium?
Note: Please show how you came up with the solution.