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QUESTION

You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 11 percent, -11 percent, 18 percent, 23 percent,...

You've observed the following returns on SkyNet Data Corporation's stock over the past five years: 11 percent, -11 percent, 18 percent, 23 percent, and 10 percent. Suppose the average inflation rate over this period was 2 percent and the average T-bill rate over the period was 3.1 percent.

What was the average real risk-free rate over this time period?

Average real risk-free rate

What was the average real risk premium?

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