observed the following ars: 4 percent, −10 percent, 23 percent, 18 percent, and 12 percent. The avera n rate over this period was 3.1 percent and the average T-bill rate was 5 percent was the average real return on the company's stock? age real return 6.11% 12.79% 6.72% 5.81% 6.42% at was the average nominal risk premium on the company's stock? werage nominal risk premium 4.40% 0.61% 4.00% 3.56%
observed the following ars: 4 percent, −10 percent, 23 percent, 18 percent, and 12 percent. The avera n rate over this period was 3.1 percent and the average T-bill rate was 5 percent was the average real return on the company's stock? age real return 6.11% 12.79% 6.72% 5.81% 6.42% at was the average nominal risk premium on the company's stock? werage nominal risk premium 4.40% 0.61% 4.00% 3.56%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You've observed the following returns on Crash-n-Burn Computer's stock over the past
five years: 4 percent, -10 percent, 23 percent, 18 percent, and 12 percent. The average
inflation rate over this period was 3.1 percent and the average T-bill rate was 5 percent.
What was the average real return on the company's stock?
Average real return
6.11%
12.79%
6.72%
5.81%
6.42%
What was the average nominal risk premium on the company's stock?
Average nominal risk premium
4.40%
0.61%
4.00%
3.56%
3.12%
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