You've observed the following returns on Pine Computer's stock over the past five years: -24.9 percent,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You've observed the following returns on Pine Computer's stock over the past five years: -24.9 percent, 13.6 percent, 30.2 percent, 2.3 percent, and 21.3 percent. The average inflation rate over this period was 3.23 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real risk-free rate over this time period? Note: 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 real risk premium? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Average real risk-free rate b. Average real risk premium 1.07 % 7.43 % You've observed the following returns on Pine Computer's stock over the past five years: -24.9 percent, 13.6 percent, 30.2 percent, 2.3 percent, and 21.3 percent. The average inflation rate over this period was 3.23 percent and the average T-bill rate over the period was 4.3 percent. a. What was the average real risk-free rate over this time period? Note: 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 real risk premium? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Average real risk-free rate b. Average real risk premium 1.07 % 7.43 %
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Discuss three quotes from the YouTube video (put time stamps after you type the quote) and explain why chose this quote. https://youtu.be/h86MGjGAtYk?si=_1hMyOefl0L3E4ox Example: Radio is "still...
-
Assume that a length of axon membrane of about 10 cm is excited by an action potential (length excited = nerve speed pulse duration = 50 m/s 2.0 ms ? 10 cm). In the resting state, the outer surface...
-
The US Centers for Disease Control (CDC) has been monitoring the rate of deaths from opioid overdoses for at least the last 15 years. In 2013, the rate of opioid-related deaths has risen to 6.8...
-
Continuing Problem: Front Row Entertainment} Cam and Anna are very satisfied with their first month of operations. Their major effort centred on signing various artists to live performance contracts,...
-
Miller Cereals is a small milling company that makes a single brand of cereal. Recently, a business school intern recommended that the company introduce a second cereal in order to "diversify the...
-
(18 m/s; 20 kpa) should be the answer 5. Water flowing through a horizontal pipe has a speed of 2.0 m/s when the diameter is 6.0 cm and the pressure is 180 kPa. Calculate the speed and the pressure...
-
Assume that Walmart Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids...
-
A company has been paying a $0.88 dividend and as it faces no growth opportunities it is expected that the dividend will not change in the future. If investors require a 23.21% return for this...
-
What is the CAPM required return of a stock with a beta of 0.7 if the risk-free rate is 1.0% and the expected marketreturnis 5.1%? Answer in percent, rounded to two decimal places. (e.g., 4.32% =...
-
You want to see if it makes a difference which lane to be in when there is traffic. You randomly observe 348 cars as they pass by on the four lane freeway. The results are displayed in the table...
-
An office is considering purchasing a new IT system at a cost of $60,000 The system will result in a $45,000 improvement in yearly sales, resulting in an additional $21,000 in cost of goods sold. The...
-
4. Assign num1 = 10 and num2 = 5 then print the sum, difference, product, quotient and the remainder of the two integers. Expected Output: Sum = (answer) Difference (answer) Product (answer) Quotient...
-
Describe the three primary ways of incorporating dividends into the binomial model.
-
How has the too-big-to-fail policy been limited in the FDICIA legislation? How might limiting the too-big-to-fail policy help reduce the risk of a future banking crisis?
-
How many Hamilton cycles are in the graph? W Complete Graph R
-
Find the number of ways to arrange the letters \(v, w, x, y\), and \(z\).
-
Find the weight of the Hamilton cycle \(m ightarrow 0 ightarrow p ightarrow n ightarrow q ightarrow m\) in the given figure. 5 5, m 3 4 n 8 5' P 5 Weighted Complete Graph with Five Vertices
Study smarter with the SolutionInn App