Question: You ve observed the following returns on Pine Computer s stock over the past five years: 1 3 percent, 1 3 percent, 2 0 percent,

Youve observed the following returns on Pine Computers stock over the past five years: 13 percent, 13 percent, 20 percent, 25 percent, and 10 percent. Suppose the average inflation rate over this period was 3 percent and the average T-bill rate over the period was 3.3 percent.
a.
What was the average real return on the companys 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 nominal risk premium on the companys stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g.,32.1.)

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