You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent,...

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent, -15 percent, 19 percent, 37 percent, and 18 percent. Suppose the average inflation rate over this period was 3.81 percent and the average T-bill rate over the period was 4.62 percent. What was the average real risk premium over this time period?

(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)

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 8 months ago

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...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

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 percent and the average T-bill rate over the period was 3.1 percent. a. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent, -12 percent, 24 percent, 20 percent, and 15 percent. Requirement 1: What was the average return on Crash-n-Burn’s stock over this five year period? (Click to select) 10.20% 12.75% 12.14% 11.12% 8.26% Requirement 2: (a) What was the variance of Crash-n-Burn’s returns over this period? (Do not round intermediate calculations.) (Click to select) 0.01682 0.02102 0.02183 0.01913 0.01703 (b) What was the standard deviation of Crash-n-Burn’s returns over this period? (Do...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent, –10 percent, 19 percent, 18 percent, and 10 percent. Suppose the average inflation rate over this period was 2.7 percent and the average T-bill rate over the period was 4.8 percent. a. What was the average real risk-free rate over this time period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent, –10 percent, 19 percent, 18 percent, and 10 percent. a. What was the arithmetic average return on the company’s stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company’s returns over this period? (Do not round intermediate calculations and round your answer...

1) You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 2...

1) You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 2 percent, -9 percent, 29 percent, 14 percent, and 13 percent. The average inflation rate over this period was 3.2 percent and the average T-bill rate was 4.95 percent. Requirement 1: What was the average real return on Crash-n-Burn’s stock? 13.31% 6.08% 6.72% 7.03% 6.40% Requirement 2: What was the average nominal risk premium on Crash-n-Burn’s stock? 0.64% 4.41% 4.855 3.93% 3.44 2) A stock...

You have watched the following returns on Crash-n-Burn Computer’s stock over the past five years: 16...

You have watched the following returns on Crash-n-Burn Computer’s stock over the past five years: 16 percent, –5 percent, 19 percent, 13 percent, and 10 percent. a. What was the arithmetic average return on the company’s stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company’s returns over this period? (Do not round intermediate calculations and round your...

You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 17 percent,...

You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 17 percent, −4 percent, 20 percent, 12 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company's stock returns over this period? (Do not round intermediate calculations and round your...

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 17 percent,...

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 17 percent, –15 percent, 19 percent, 29 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) Average return % b-1 What was the variance of the company's stock returns over this period? (Do not round intermediate calculations...

1a. You’ve observed the following returns on Boca Inc’s stock over the past five years: 7...

1a. You’ve observed the following returns on Boca Inc’s stock over the past five years: 7 percent, ?13 percent, 21 percent, 34 percent, and 15 percent. What was the arithmetic average return on Crash-n-Burn’s stock over this five-year period? What was the variance of Crash-n-Burn’s returns over this period? The standard deviation? 1b. A stock has had the following year-end prices and dividends: Year Price Dividend 1 $51.50 - 2 59.32 $0.65 3 64.13 0.70 4 57.86 0.77 5 65.19...

Question

You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7 percent,...

Solutions

Expert Solution

Related Solutions

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: 11 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 4 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 11 percent,...

1) You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 2...

You have watched the following returns on Crash-n-Burn Computer’s stock over the past five years: 16...

You’ve observed the following returns on Bennington Corporation’s stock over the past five years: 17 percent,...

You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 17 percent,...

1a. You’ve observed the following returns on Boca Inc’s stock over the past five years: 7...