You've observed the following returns on Pine Computer's stock over the past five years: -29.1 percent, 16.4 percent, 35.8 percent, 3.7 percent, and 22.7 percent. The average inflation rate over this period was 3.37 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What was the average nominal risk premium on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Average real return b. Average nominal risk premium % %
You've observed the following returns on Pine Computer's stock over the past five years: -29.1 percent, 16.4 percent, 35.8 percent, 3.7 percent, and 22.7 percent. The average inflation rate over this period was 3.37 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What was the average nominal risk premium on the stock? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Average real return b. Average nominal risk premium % %
Chapter13: Direct Foreign Investment
Section: Chapter Questions
Problem 1IEE
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please help!
![You've observed the following returns on Pine Computer's stock over the past five years: -29.1 percent, 16.4 percent, 35.8 percent, 3.7
percent, and 22.7 percent. The average inflation rate over this period was 3.37 percent and the average T-bill rate over the period was
4.3 percent.
a. What was the average real return on the stock?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What was the average nominal risk premium on the stock?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
a. Average real return
b. Average nominal risk premium
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F800d34a4-afc4-4310-9878-cece81ab3b96%2F102efc8d-a882-48c3-a129-ec3577639291%2Fwi3nurh_processed.png&w=3840&q=75)
Transcribed Image Text:You've observed the following returns on Pine Computer's stock over the past five years: -29.1 percent, 16.4 percent, 35.8 percent, 3.7
percent, and 22.7 percent. The average inflation rate over this period was 3.37 percent and the average T-bill rate over the period was
4.3 percent.
a. What was the average real return on the stock?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
b. What was the average nominal risk premium on the stock?
Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.
a. Average real return
b. Average nominal risk premium
%
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