Problemyouve observed the following returns on crash-n-burn, Ask an Expert

Accounting

Problem:

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 11 percent, -11 percent, 18 percent, 23 percent, and 10 percent. Suppose the average inflation rate over this period was 2.0 percent and the average T-bill rate over the period was 3.1 percent.

Requirement:

Question: What was the average real risk-free rate over this time period?

Question: What was the average real risk premium?

Note: Please show guided help with steps and answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172953

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