You've observed the following returns on Crash-n-Burn Computer's stock over the pastfive years: 4 percent, -10 percent, 23 percent, 18 percent, and 12 percent. The averageinflation rate over this period was 3.1 percent and the average T-bill rate was 5 percent.What was the average real return on the company's stock?Average real return6.11%12.79%6.72%5.81%6.42%What was the average nominal risk premium on the company's stock?Average nominal risk premium4.40%0.61%4.00%3.56%3.12%

Average rate of return is used in stock market to measure the return over the period of time.

observed the following ars: 4 percent, −10 percent, 23 percent, 18 percent, and 12 percent. The avera n rate over this period was 3.1 percent and the average T-bill rate was 5 percent was the average real return on the company's stock? age real return 6.11% 12.79% 6.72% 5.81% 6.42% at was the average nominal risk premium on the company's stock? werage nominal risk premium 4.40% 0.61% 4.00% 3.56%

observed the following ars: 4 percent, −10 percent, 23 percent, 18 percent, and 12 percent. The avera n rate over this period was 3.1 percent and the average T-bill rate was 5 percent was the average real return on the company's stock? age real return 6.11% 12.79% 6.72% 5.81% 6.42% at was the average nominal risk premium on the company's stock? werage nominal risk premium 4.40% 0.61% 4.00% 3.56%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 17P

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