QuizChap10

QuizChap10 - Homework Manager Corporate Finance FIN301-004...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Question 1: Score 0/1 Your response Correct response Calculating Real Returns and Risk Premiums You've observed the following returns on Hacker Corporation's stock over the past five years: 36 percent, -9 percent, 1 percent, 7 percent, and 24 percent. Suppose the average inflation rate over this time period was 3.7 percent and the average T-bill rate was 5.65 percent. The average real return on Hacker Corporation's stock was 0 (0%) percent and the average nominal risk premium on Hacker Corporation's stock was 0 (0%) percent. (Input answers as a percent rounded to 2 decimal places, without the percent sign.) Calculating Real Returns and Risk Premiums You've observed the following returns on Hacker Corporation's stock over the past five years: 36 percent, 1 percent, 7 percent, and 24 percent. Suppose the average inflation rate over this time peri percent and the average T-bill rate was 5.65 percent. The average real return on Hacker Corporation's 7.81 with a tolerance of ± 1.0% percent and the average nominal risk premium Corporation's stock was 6.15 with a tolerance of ± 1.0% percent. (Input answers as rounded to 2 decimal places, without the percent sign.) Total grade: 0.0×1/2 + 0.0×1/2 = 0% + 0% Feedback: (a) To find the average return, we sum all the returns and divide by the number of returns, so: Arithmetic average return = ((0.36) +(-0.09) + (0.01) + (0.07) + (0.24))/5
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 2

QuizChap10 - Homework Manager Corporate Finance FIN301-004...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online