Problem 12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following nominal returns on...

Transcribed Image Text:

Problem 12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following nominal returns on Regina Computer's stock over the past five years: 15%, -15%, 17 %, 27%, and 10%. suppose the average inflation rate over this period was 1.6% and the average T-bill rate over the period was 4.1%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return % b. What was the average nominal risk premium on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average nominal risk premium % Problem 12-10 Calculating Real Returns and Risk Premiums (LO1) You've observed the following nominal returns on Regina Computer's stock over the past five years: 15%, -15%, 17 %, 27%, and 10%. suppose the average inflation rate over this period was 1.6% and the average T-bill rate over the period was 4.1%. a. What was the average real return on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average real return % b. What was the average nominal risk premium on Regina's stock? (Do not round intermediate calculations Round the final answer to 2 decimal places.) Average nominal risk premium %