You’ve observed the following returns on Barnett Corporation’s stock over the past five years: –28.2 percent, 15.8 percent, 34.6 percent, 3.4 percent, and 22.4 percent. The average inflation rate over this period was 3.34 percent and the average T-bill rate over the period was 4.3 percent.
1. What was the average real risk-free rate over this time period?
Average real risk-free rate__________%
2. What was the average real risk premium?
Average real risk premium__________%