What was average nominal risk premium on crash-n-burn stock

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Reference no: EM131333993

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent, -12 percent, 26 percent, 16 percent, and 16 percent. The average inflation rate over this period was 3.6 percent and the average T-bill rate was 5 percent.

Requirement 1: What was the average real return on Crash-n-Burn’s stock? (Do not round intermediate calculations.)

a. 13.96% b. 6.49% c. 5.87% d. 6.18% e. 6.80%

Requirement 2: What was the average nominal risk premium on Crash-n-Burn’s stock? (Do not round intermediate calculations.)

a. 25% b. 4.05% c. .62% d. 3.55% e. 4.55%

Reference no: EM131333993

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