ZuoTi.Pro
Question

Average real return

You’ve observed the following returns on Staverosky Corporation’s stock over the past five years: –27.6 percent, 15.4 percent, 33.8 percent, 3.2 percent, and 22.2percent. The average inflation rate over this period was 3.32 percent and the average T-bill rate over the period was 4.3 percent.

What was the average real return on the stock?

What was the average nominal risk premium on the stock?
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Avge Return on stock = (-27.6%+15.4%+33.8%+3.2%+22.2%)/5 = 9.40%
Avge Real return = Avge Return - Avge Inflation rate = 9.40% - 3.32% = 6.08% ..Ans(1)

average nominal risk premium on the stock = Avge Real return-Krf = 6.08%-4.3% = 1.78%

answered by: Sheil
0 4
Add a comment
Know the answer?
Add Answer to:
Average real return
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • You've observed the following returns on Yamauchi Corporation's stock over the past five years: -27.6 percent, 15.4 per...

    You've observed the following returns on Yamauchi Corporation's stock over the past five years: -27.6 percent, 15.4 percent, 33.8 percent, 3.2 percent, and 22.2 percent. The average inflation rate over this period was 3.32 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average...

  • You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: –25.8 percent,...

    You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: –25.8 percent, 14.2 percent, 31.4 percent, 2.6 percent, and 21.6 percent. The average inflation rate over this period was 3.26 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average...

  • You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 20 percent,...

    You’ve observed the following returns on Yasmin Corporation’s stock over the past five years: 20 percent, –12 percent, 17 percent, 20 percent, and 10 percent. Suppose the average inflation rate over this period was 1.7 percent and the average T-bill rate over the period was 4.6 percent. a. What was the average real return on the company's stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return ______...

  • You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 17...

    You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 17 percent, –15 percent, 19 percent, 29 percent, and 10 percent. Suppose the average inflation rate over this period was 2.6 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the company's stock? (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: 12 percent,...

    You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 12 percent, –12 percent, 19 percent, 24 percent, and 10 percent. Suppose the average inflation rate over this period was 2.5 percent and the average T-bill rate over the period was 3.2 percent. a. What was the average real return on the company’s stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was...

  • You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 12 percent,...

    You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 12 percent, –9 percent, 20 percent, 17 percent, and 10 percent. Suppose the average inflation rate over this period was 3.2 percent and the average T-bill rate over the period was 4.9 percent. a. What was the average real return on the company’s stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was...

  • You've observed the following returns on Yamauchi Corporation's stock over the past five years: -28.8 percent,...

    You've observed the following returns on Yamauchi Corporation's stock over the past five years: -28.8 percent, 16.2 percent, 35.4 percent, 3.6 percent, and 22.6 percent. The average inflation rate over this period was 3.36 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real return on the stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was the average...

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

    You've observed the following returns on Crash-n-Burn Computer's stock over the past five years: 16 percent, -16 percent, 18 percent, 28 percent, and 10 percent. Suppose the average inflation rate over this period was 2.1 percent and the average T-bill rate over the period was 4.2 percent. a. What was the average real return on the company's stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What was...

  • You've observed the following returns on Crashen-Burn Computer's stock over the past five years 12 percent,...

    You've observed the following returns on Crashen-Burn Computer's stock over the past five years 12 percent, -12 percent, 19 percent, 24 percent, and 10 percent. Suppose the average inflation rate over this period was 2.5 percent and the average T-bill rate over the period was 3.2 percent a. What was the average real return on Crash-n-Burn's stock? (Do not found intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Average real return b. What...

  • You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: −10 percent,...

    You’ve observed the following returns on Yamauchi Corporation’s stock over the past five years: −10 percent, 24 percent, 21 percent, 11 percent, and 8 percent. The average inflation rate over this period was 3.1 percent and the average T-bill rate over the period was 4.1 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 was...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT