You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 16 percent, -16 percent, 18 percent, 28 percent, and 10 percent. Suppose the average inflation rate over this period was 2.1 percent and the average T-bill rate over the period was 4.2 percent. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What was the average real risk premium? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real risk-free rate Average real risk premium % %

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
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You've observed the following returns on SkyNet Data Corporation's stock over the past
five years: 16 percent, -16 percent, 18 percent, 28 percent, and 10 percent. Suppose the
average inflation rate over this period was 2.1 percent and the average T-bill rate over
the period was 4.2 percent.
What was the average real risk-free rate over this time period? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2 decimal
places, e.g., 32.16.)
What was the average real risk premium? (Do not round intermediate calculations and
enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Average real risk-free rate
Average real risk premium
%
%
Transcribed Image Text:You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 16 percent, -16 percent, 18 percent, 28 percent, and 10 percent. Suppose the average inflation rate over this period was 2.1 percent and the average T-bill rate over the period was 4.2 percent. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What was the average real risk premium? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real risk-free rate Average real risk premium % %
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