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QUESTION

You've observed the following returns on Staverosky Corporation's stock over the past five years:6 percent, 13.4 percent, 29.8 percent, 2.2 percent,...

You've observed the following returns on Staverosky Corporation's stock over the past five years: -24.6 percent, 13.4 percent, 29.8 percent, 2.2 percent, and 21.2 percent. The average inflation rate over this period was 3.22 percent and the average T-bill rate over the period was 4.3 percent.

Requirement 1:What was the average real risk-free rate over this time period? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

Requirement 2:What was the average real risk premium? (Do not include the percent sign (%). Round your answer to 2 decimal places (e.g., 32.16).)

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