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You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 9 percent,...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 9 percent, -15 percent, 21 percent, 33 percent, and 17 percent. Suppose the average inflation rate over this period was 3.63 percent and the average T-bill rate over the period was 4.13 percent. What was the average real risk premium over this time period?

[Hint: Step 1: Calculate the average real rate of return for Crash-n-Burn Computer. Step 2: Calculate the average real rate of return for the T-bill. Step 3: Subtract (average real rate of return for Crash-n-Burn Computer) - (average real rate of return for the T-bill). (Enter your answer as a percentage, omit the "%" sign in your response, and round your answer to 2 decimal places. For example, 0.12345 or 12.345% should be entered as 12.35)

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jeff jeffy answered 8 months ago
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