You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -13 percent, 24 percent, 14 percent, and 17 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was 4.5 percent. Requirement 1: What was the average real return on Crash-n-Burn's stock? (Do not round intermediate calculations.) (Click to select) Requirement 2: What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round intermediate calculations.) (Click to select)
You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 4 percent, -13 percent, 24 percent, 14 percent, and 17 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was 4.5 percent. Requirement 1: What was the average real return on Crash-n-Burn's stock? (Do not round intermediate calculations.) (Click to select) Requirement 2: What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round intermediate calculations.) (Click to select)
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, -13 percent, 24 percent, 14 percent, and 17 percent. The average
inflation rate over this period was 3.6 percent and the average T-bill rate was 4.5
percent.
Requirement 1:
What was the average real return on Crash-n-Burn's stock? (Do not round intermediate
calculations.)
(Click to select)
Requirement 2:
What was the average nominal risk premium on Crash-n-Burn's stock? (Do not round
intermediate calculations.)
(Click to select)
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