You've observed the following returns on Pine Computer's stock over the past five years: 8 percent, -12 pe percent, 21 percent, and 16 percent. The average inflation rate over this period was 3.1 percent and the ave over the period was 4.1 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 de 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 d 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: 8 percent, -12 pe percent, 21 percent, and 16 percent. The average inflation rate over this period was 3.1 percent and the ave over the period was 4.1 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 de 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 d e.g., 32.16. a. Average real return b. Average nominal risk premium % %
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 18PROB
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