You've seen the following returns on a stock over the past five years: 6 percent, 12...

  

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You've seen the following returns on a stock over the past five years: 6 percent, 12 percent, 20 percent, -6 percent, and 11 percent. Suppose the average inflation rate over this time period was 2.5 percent and the average T-bill rate was 3.3 percent. What was the average nominal risk premium? You've seen the following returns on a stock over the past five years: 6 percent, 12 percent, 20 percent, -6 percent, and 11 percent. Suppose the average inflation rate over this time period was 2.5 percent and the average T-bill rate was 3.3 percent. What was the average nominal risk premium?

Answer rating: 100% (QA)

To calculate the average nominal risk premium we can follow these steps 1 Calculate the excess retur... View the full answer