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

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Problem:

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 3 percent, -11 percent, 27 percent, 21 percent, and 14 percent. The average inflation rate over this period was 3.9 percent and the average T-bill rate was 5 percent.

Required:

Question 1: What was the average real return on Crash-n-Burn's stock?

Question 2: What was the average nominal risk premium on Crash-n-Burn's stock?

Note: Explain the solution in detail.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91174838

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