1. You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 5 percent, -11 percent, 23 percent, 13 percent, and 16 percent. The average inflation rate over this period was 3.8 percent and the average T-bill rate was 5.55 percent.

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

4.94%

5.20%

13.35%

5.72%

5.46%

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

3.32%

0.52%

2.59%

2.96%

3.65%