1 2 FILE HOME INSERT Calibri Calculating real returns and risk premiums - Excel PAGE LAYOUT 11 A FORMULAS % DATA REVIEW VIEW Paste BIU- 29- Alignment Number Conditional Format as Cell Cells Formatting Table-Styles™ Editing Clipboard Font 17 Styles A1 V x ✓ fx A B C D E F G H J K You've observed the following returns on Crash-n-Burn Computer's stock over the past five years. The average inflation rate over this period was 3.5 percent and the average T-bill rate was 4.2 percent. What was the average real return on the stock? What was the average nominal risk premium on the stock? 7 45651 Year Returns 1 7% 2 -13% 9 3 21% 10 4 34% 11 5 15% 12 13 Average inflation rate 3.5% 14 Average T-bill rate 4.2% 15 16 17 Complete the following analysis. Do not hard code values in your calculations. Make sure to use the "sample" Excel formulas in your calculations. 18 19 Arithmetic average nominal return 20 21 Average real return 22 23 Average risk premium 34 Sign In x D
1 2 FILE HOME INSERT Calibri Calculating real returns and risk premiums - Excel PAGE LAYOUT 11 A FORMULAS % DATA REVIEW VIEW Paste BIU- 29- Alignment Number Conditional Format as Cell Cells Formatting Table-Styles™ Editing Clipboard Font 17 Styles A1 V x ✓ fx A B C D E F G H J K You've observed the following returns on Crash-n-Burn Computer's stock over the past five years. The average inflation rate over this period was 3.5 percent and the average T-bill rate was 4.2 percent. What was the average real return on the stock? What was the average nominal risk premium on the stock? 7 45651 Year Returns 1 7% 2 -13% 9 3 21% 10 4 34% 11 5 15% 12 13 Average inflation rate 3.5% 14 Average T-bill rate 4.2% 15 16 17 Complete the following analysis. Do not hard code values in your calculations. Make sure to use the "sample" Excel formulas in your calculations. 18 19 Arithmetic average nominal return 20 21 Average real return 22 23 Average risk premium 34 Sign In x D
Chapter13: Direct Foreign Investment
Section: Chapter Questions
Problem 1IEE
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All answers must be entered as a formula only. Please reference the correct cell(s) or the cell(s) value.
Transcribed Image Text:1
2
FILE
HOME
INSERT
Calibri
Calculating real returns and risk premiums - Excel
PAGE LAYOUT
11
A
FORMULAS
%
DATA
REVIEW
VIEW
Paste
BIU-
29-
Alignment Number Conditional Format as Cell Cells
Formatting Table-Styles™
Editing
Clipboard
Font
17
Styles
A1
V
x
✓
fx
A
B
C
D
E
F
G
H
J
K
You've observed the following returns on Crash-n-Burn Computer's stock over the past
five years. The average inflation rate over this period was 3.5 percent and the average
T-bill rate was 4.2 percent. What was the average real return on the stock? What was
the average nominal risk premium on the stock?
7
45651
Year
Returns
1
7%
2
-13%
9
3
21%
10
4
34%
11
5
15%
12
13
Average inflation rate
3.5%
14
Average T-bill rate
4.2%
15
16
17
Complete the following analysis. Do not hard code values in your calculations.
Make sure to use the "sample" Excel formulas in your calculations.
18
19
Arithmetic average nominal return
20
21
Average real return
22
23
Average risk premium
34
Sign In
x
D
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