You've observed the following returns on Barnett Corporation's stock over the past five years: -12 percent, 23 percent, 18 percent, 7 percent, and 13 percent. Suppose the average inflation rate over this period was 3.2 percent and the average T-Bill rate over the period was 4.3 percent.
Answer the following questions:
a) What was the average (nominal) return on the stock?
b) What was the risk premium on the stock?