Yoursquove observed the following nominal returns on, Ask an Expert

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You’ve observed the following "nominal" returns on Crash-n-Burn Computer’s stock over the past five years: 2 percent, -11 percent, 23 percent, 16 percent, and 16 percent. The average inflation rate over this period was 3.4 percent and the average T-bill rate was 5.35 percent.

Requirement 1:

What was the average "real" return on Crash-n-Burn’s stock? Note: Use the Fisher Effect Formula from the Bond chapter to convert nominal to real rates of return. (Do not round intermediate calculations.)

Requirement 2:

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

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92075346

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