9. Calculating Returns and Variability [LO1] Youâve observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7percent, -13 percent, 21 percent, 34 percent and 15 percent.
a. What was the arithmetic average return on Crash-n-Burn's stock over this five year period?
b. What was the variance of Crash-n-Burn's returns over this period? The standard deviation?
10. Calculating Real Returns and Risk Premiums [LO1] For problem 9, suppose the average inflation rate over this period was 3.5 percent and the average T-bill rate over the period was 4.2 percent.
a. What was the average real return on Crash-n-Burn's stock?
b. What was the average nominal risk premium on Crash-n-Burn's stock?
9. Calculating Returns and Variability [LO1] Youâve observed the following returns on Crash-n-Burn Computer's stock over the past five years: 7percent, -13 percent, 21 percent, 34 percent and 15 percent.
a. What was the arithmetic average return on Crash-n-Burn's stock over this five year period?
b. What was the variance of Crash-n-Burn's returns over this period? The standard deviation?
10. Calculating Real Returns and Risk Premiums [LO1] For problem 9, suppose the average inflation rate over this period was 3.5 percent and the average T-bill rate over the period was 4.2 percent.
a. What was the average real return on Crash-n-Burn's stock?
b. What was the average nominal risk premium on Crash-n-Burn's stock?
Related questions
| Youâve observed the following returns on Crash-n-Burn Computerâs stock over the past five years: 13 percent, â13 percent, 20 percent, 25 percent, and 10 percent. |
| a. | What was the arithmetic average return on Crash-n-Burnâs stock over this five-year period? (Round your answer to 1 decimal place. (e.g., 32.1)) |
| Average return | % |
| b-1 | What was the variance of Crash-n-Burnâs returns over this period? (Round your answer to 5 decimal places. (e.g., 32.16161)) |
| Variance |
| b-2 | What was the standard deviation of Crash-n-Burnâs returns over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) |
| Standard deviation | % |
