1. You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 5 percent, -11 percent, 23 percent, 13 percent, and 16 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 5.55 percent.
What was the average real return on Crash-n-Burn’s stock? (Do not round intermediate calculations.)
4.94%
5.20%
13.35%
5.72%
5.46%
2. What was the average nominal risk premium on Crash-n-Burn’s stock? (Do not round intermediate calculations.)
3.32%
0.52%
2.59%
2.96%
3.65%